It includes capital reserve requirements and stable funding sources for banks
The Central Bank extends the measures of the economic support plan until the end of June 2022
Liquidity measures include a temporary prudent reduction in the proportion of eligible liquid assets.
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Khaled Muhammad Balama: “The comprehensive economic support plan has proven its effectiveness in supporting the financial system and the national economy.”
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The Central Bank of the Emirates has extended many of the measures included in the targeted comprehensive economic support plan with the aim of supporting the continuous recovery of the country's economy.
The bank stated in a statement yesterday that the precautionary measures regarding capital reserve requirements, liquidity, and requirements for stable funding sources for banks will be extended for a period of six months, until the end of June 2022.
According to the statement, all banks operating in the country will be able to take advantage of these measures to support a balanced and sustainable recovery.
The Central Bank clarified that the reserve capital measures will include a temporary reduction of the capital preservation margin and the capital reserve established for local banks of systemic importance.
As for the liquidity measures, they consist of a temporary prudential reduction in the liquidity coverage ratio, the ratio of eligible liquid assets, the ratio of net stable funding, and the ratio of advances to stable resources.
gradual exit
The Central Bank had announced earlier this year that the program for deferring loan installments, which was included in the directed comprehensive economic support plan, will expire on December 31, 2021, which is the first stage of the “Central” strategy for a gradual exit from the measures that were applied during the “Covid-Covid” pandemic. 19”, at a time when the support plan program to support new lending and financing will continue until June 30, 2022.
The Central Bank’s strategy for a gradual exit from the directed comprehensive economic support plan will ensure a balance between lifting measures on the one hand, and a continuous commitment to support the recovery witnessed by the country’s economy on the other.
Additional support measures introduced during the pandemic include reduced mandatory reserve requirements and a reduction in the down payment for new mortgage loans, and will remain in effect temporarily.
Financial system
The Governor of the Central Bank, Khaled Muhammad Balama, said that the targeted comprehensive economic support plan has proven its effectiveness in supporting the financial system of the UAE and the national economy throughout the pandemic period.
He added, "With the economic recovery gaining noticeable momentum, the Central Bank has modified the support plan, so that measures designed to reduce the immediate negative effects of the pandemic have been replaced by targeted measures to support economic recovery."
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