UAE Central Bank withdraws Dhs10.9bn in excess liquidity during August

The Central Bank of the UAE (CBUAE) withdrew Dhs10.9bn from additional liquidity during the month of August to maintain economic resilience.

This move came after the central bank met the market needs for liquidity in previous months, official news agency WAM reported.

The decision to do so was also aligned with the CBUAE’s mandate to direct the country’s credit policy, and to regulate and oversee the monetary and banking policies to strengthen the domestic economy.

The statistics released by the apex bank indicated a rise in the cumulative total of certificates of deposits from Dhs146.1bn by end of July to Dhs157bn by the end of August.

By the end of Q1, the CBUAE had pumped a considerable amount of funds, before starting to remove excess liquidity from June.

In the wake of the Covid-19 pandemic, the CBUAE had introduced a Dhs100bn ‘Targeted Economic Support Scheme‘ in March, which consisted of zero-interest, collateralised loans worth Dhs50bn for local banks and an additional Dhs50bn freed up from banks’ capital buffers.

Read: UAE Central Bank announces Dhs100bn package to counter Covid-19

The scheme was to help mitigate the fallout of the Covid-19 pandemic and to prop up the economy.

Upto Dhs44.72bn of the Dhs50bn liquidity facility was drawn out by UAE lenders until the end of July this year.

Read more: UAE banks avail Dhs44.72bn of TESS liquidity scheme by end July

Also read: UAE Central Bank projects economic recovery in second half of 2020