UAE Central Bank Says Discount Window On Track

The United Arab Emirates central bank said on Wednesday that preparations to introduce a discount window were proceeding, though it declined to specify when the facility would be ready.

Last September, the central bank announced it would develop its monetary policy framework by launching a discount window to enable banks to borrow intra-day and overnight funds.

On Wednesday, central bank governor Sultan Nasser al-Suweidi said: “It takes time of course to make studies and put systems. We are on track.”

Asked whether the window might open this year, he told reporters on the sidelines of a regional central bankers’ meeting in Bahrain: “I cannot give you any date. It is not only regulations, it is computer systems. So you have to develop the right computer systems…that take different currencies into consideration.”

In January last year, the UAE signed a three-year currency swap agreement with China worth Dhs20 billion ($5.5 billion) to boost two-way trade and investment.

Asked whether the UAE was considering holding part of its foreign reserves in yuan, in line with the growing international use of the Chinese currency, Suweidi said:

“It is also on track. We are studying different issues related to the swap agreement, and of course we are looking at the experiences of other countries like Asian countries that have these agreements with the Chinese.” He did not elaborate.