*Steady growth in liquidity a new sign of the gradual economic recovery, primarily in retail and commercial platforms
*UAE Central Bank’s report says liquid assets accounted for 15.9 percent of the total assets by the end of the first quarter
Liquid assets held by UAE-based banks increased 2.6 percent to AED486.58 billion ($132.47) in Q1’21 from AED474.136 bn in the last quarter of last year, media reports said.
UAE Central Bank’s Core Financial Soundness Indicators report, which was released Monday, said the growth in liquidity is yet a new sign of the gradual economic recovery underway across all sectors, primarily the retail and commercial platforms, despite the economic fallout from the pandemic.
Liquid assets accounted for 15.9 percent of the total assets by the end of the reference quarter, according to the report.
Liquid assets consist of eligible liquid assets (cash in hand, banks’ liquid assets at the Central Bank and eligible bonds/ sukuks as prescribed by CBUAE regulation) interbank placements; and interbank lending covered by repurchase agreements per the FSI Compilation Guide issued by IMF.
In March, the Central Bank had said liquidity in UAE’s banking system had returned to pre-Covid 19 levels as the economy continued to recover from the pandemic.
The Central Bank had said that banks had now substantially reduced their use of the Targeted Economic Support Scheme, the AED 50bn zero-cost funding program set up a year ago to help lenders maintain funding flows through the economy.
Extended to June 30 this year, the funding program is part of local and federal support packages worth Dh388bn. By March, the Central Bank had said, more than 320,000 customers – including individual clients, small to medium enterprises and other private corporations – benefitted from Tess.
Currently, there are about 175,000 customers taking advantage of the program, allowing them to defer loans.
