UAE Central Bank Unveils Major Financial Support Plan

The Central Bank of the UAE (CBUAE) has approved a major financial resilience package to strengthen the country’s banking sector and support the wider economy during ongoing global and regional uncertainty.

The decision was made during a board meeting chaired by Sheikh Mansour bin Zayed Al Nahyan. The package focuses on five key areas aimed at improving liquidity, increasing flexibility, and providing regulatory relief to banks.

As part of the new measures, banks will get better access to liquidity. This includes the ability to use their reserve balances and access term funding in both UAE dirhams and US dollars.

The central bank has also introduced temporary relief on liquidity and funding requirements. This will allow banks to continue providing loans and financial support to businesses and individuals without pressure.

In addition, capital buffer requirements have been eased. This means banks can use extra capital to increase lending. New rules also give banks more flexibility in managing credit risk, including delaying the classification of certain loans affected by current economic conditions.

The authorities have clearly stated that banks are expected to continue lending and supporting customers as part of the country’s overall economic response.

During the meeting, the board noted that the UAE’s financial system remains strong despite global challenges. There has been no major impact on the banking sector or payment systems so far.

The central bank highlighted that it manages foreign exchange reserves of over AED 1 trillion (USD 270 billion) and maintains a strong monetary base cover ratio of 119%. The UAE’s banking sector is valued at around AED 5.4 trillion.

Liquidity in the banking system also remains high. UAE banks currently hold around AED 920 billion in liquidity with the central bank, including over AED 400 billion in reserve balances.

The CBUAE confirmed that it is ready to take additional steps if needed to maintain financial stability and protect the economy.