The Central Bank of the United Arab Emirates has said total bank deposits increased by 0.7 percent by August-end, according to local reports.
The deposits rose to AED1,928.7 billion ($525.17 billion) at the end of August from AED1,915.1 billion ($521.47 billion) at the end of July.
In a statement, the CBUAE attributed the rise in total bank deposits to a 0.6 percent increase in resident deposits and 1.5 percent increase in non-resident deposits.
Resident deposits rose due to a 4.6 percent rise in government-related entities’ deposits and 0.6 percent rise in private-sector deposits, superseding reductions in government sector deposits and non-banking financial institutions deposits by 1.0 percent and 12.1 percent, respectively.
The bank also said the Money Supply aggregate M1 increased by 1.1 percent, from AED653.9 billion ($178.05 billion) at the end of July to AED661.1 billion ($180.01 billion) at the end of August.
It said: “The money supply aggregate M2 increased by 0.7 percent, from AED1,477.9 billion ($402.42 billion) at the end of July to AED1,487.8 billion ($405.12 billion) at the end of August.”
The CBUAE added: “The Money Supply aggregate M3 also increased by 0.3 percent, from AED1,775.0 billion ($483.32 billion) at the end of July to AED1,780.7 billion ($484.87 billion) at the end of August.”
The rise in M1 was due to a AED9.7 billion ($2.64 billion) increase in monetary deposits, overriding a AED2.5 billion ($680 million) reduction in currency in circulation outside banks.
M2 increased due to an increased M1 and a AED2.7 billion ($735 million) rise in quasi-monetary deposits.
M3 rose due to increases in M1 and M2, overshadowing a AED4.2 billion ($1.14 billion) drop in government deposits.
The Monetary Base expanded by 1.8 percent rising from AED436.9 billion ($118.97 billion) at the end of July to AED444.7 billion ($121.09 billion) at the end of August, said the statement.
The bank explained: “The main driving force behind this expansion in the Monetary Base was 68.5 percent increase in banks & OFCs’ current accounts and overnight deposits of banks at CBUAE, overshadowing the fall in currency issued by 2.6 percent, in reserve account by 16.2 percent and in certificates of deposit and monetary bills by 1.5 percent.”
Gross banks’ assets, including bankers’ acceptances, decreased by 0.2 percent, declining from AED3,233.4 billion ($880.44 billion) at the end of July to AED3,228.5 billion ($879.1 billion) at the end of August, according to CBUAE figures.
“Gross credit increased by 0.2 percent climbing from AED1,768.6 billion ($481.58 billion) at the end of July to AED1,771.4 billion ($482.34 billion) at the end of August,” said the central bank.
It attributed the gross credit increase to a 0.3 percent rise in domestic credit, overshadowing the 0.8 percent fall in foreign credit.
The rise in domestic credit was mainly due to 0.6 percent, 0.3 percent and a 4.5 percent increase in credit to the government sector, private sector and non-banking financial institutions respectively, despite the reduction in credit to public sector by 0.3 percent.