UAE injects further $19 bn into country’s banking sector

October 14th, 2008 - 2:12 pm ICT by IANS  

Dubai, Oct 14 (IANS) The United Arab Emirates (UAE) Tuesday injected a further 70 billion dirhams ($19 billion) to improve the liquidity position of the national banking sector after the country was impacted by the global financial crisis.Vice President and Prime Minister of the UAE and Ruler of Dubai Sheikh Mohammed Bin Rashid Al Maktoum has ordered the transfer of the amount to the country’s Ministry of Finance so that it can inject the required liquidity into the national banking sector, according to the state-run Emirates News Agency (WAM).

This brings the total amount injected to the country’s banking sector over the last month to 120 billion dirhams ($32.7 billion).

The UAE Central Bank had allocated 50 billion dirhams ($13.6 billion) Sep 22 as facilities for the banks operating in the country so that they could use them if required to avoid the current global financial crisis.

Tuesday’s move came following instructions from UAE President Sheikh Khalifa Bin Zayed Al Nahyan after the country’s key bourses went through a weeklong mayhem triggered by the global credit crunch before rebounding Monday.

Sheikh Mohammed has also ordered the setting up of a suitably qualified committee comprising officials of finance and economy ministries and the UAE Central Bank to follow up on these instructions, as well as to handle the relevant Cabinet procedures.

The UAE was among the first countries in the region to announce remedial measures like announcing interest rate cuts and assurances of liquidity to the banking sector.

Following a cabinet meeting Sunday, monetary authorities here announced that guarantee of deposits to banks in the country would last three years.

The guarantee not only includes national banks but also foreign banks, which have significant operations in the UAE.

The latest injection of 70 billion dirhams is in line with the UAE leadership’s measures to provide required guarantees to support the country’s banking sector and insulate it from the global financial crisis.

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