UAE doubles stimulus to counter coronavirus impact

ABU DHABI (AFP) – The Central Bank of the United Arab Emirates (UAE) said yesterday it has doubled to USD70 billion a stimulus package to support the economy amid the coronavirus pandemic.

“The aggregate value of all capital and liquidity measures adopted by the CBUAE since March 14, 2020 has reached AED256 billion (USD70 billion),” the central bank said in a statement.

Last month, oil-rich UAE announced stimulus worth USD35 billion that included aid to the banking system, facilities for loans and injecting funds into the bourses.

Most of the new measures focussed on easing financial and liquidity requirements for banks to free up cash for lending.

In the new measures, the central bank reduced by half to seven per cent the reserves banks are required to keep for demand deposits, which can be withdrawn by clients anytime.

This will allow for some USD16.6 billion in liquidity to be used in new bank lending, the central bank said.

The regulator’s new measures also allow banks to defer payment of loans for companies and clients until the end of 2020.

“The additional measures announced today will effectively relieve the pressure on financial institutions…offering the required relief and continued access to funding for businesses and households,” newly-appointed Governor Abdulhamid Saeed said.

Dubai’s Tolerance Bridge, typically full of tourists and exercisers, stands empty over the new coronavirus pandemic in Dubai, United Arab Emirates. PHOTO: AP