A banking official confirmed that it enhances the strength of the dirham and forms reserves and investments with attractive returns
426 billion dirhams of foreign assets owned by the Central Bank
The large foreign assets owned by the Central Bank reflect the strength of the country's financial position.
archival
The Central Bank announced that it owns foreign assets worth 426 billion dirhams, as of the end of last October, compared to 424 billion dirhams at the end of the previous September, with a monthly increase of two billion dirhams.
Yesterday, data issued by the Central Bank indicated that these assets are distributed among bank balances and deposits with banks abroad, amounting to about 246.2 billion dirhams, and foreign securities held until maturity at a value of 121.5 billion dirhams, and other foreign assets with a value of 58.12 billion dirhams.
Government and cash deposits
According to the data, government deposits increased by about 27 billion dirhams during October 2022 alone, to reach 429.4 billion dirhams by the end, compared to 402.5 billion dirhams at the end of the previous September, with a monthly growth of about 6.7%.
Cash deposits decreased slightly during last October, to reach 623.5 billion dirhams, compared to 625 billion dirhams at the end of September, with a monthly decline of 1.5 billion dirhams, but they increased on an annual basis by 8%, or the equivalent of 46.1 billion dirhams, compared to 577.4 billion dirhams in October. 2021.
Semi-cash deposits rose to 906.3 billion dirhams last October, an annual growth rate of 9.6%, compared to 826.7 billion dirhams in October 2021, an increase of 79.6 billion dirhams.
reserves
Commenting, a banking official told Emirates Al-Youm, who preferred not to be named, that the large foreign assets owned by the Central Bank enhance the country's currency, as the dirham remains strong with the support of those assets that in essence constitute reserves, some of which are liquefiable and for immediate withdrawal when needed. Such as balances, deposits and current accounts, explaining that these constitute the largest percentage of the Central Bank’s foreign assets, while the remaining percentage constitute investments in bonds or guaranteed government treasury bills, with attractive returns and low risks, and have a strong sovereign rating of no less than (A+++).
The source added that these reserves also constitute a strong wall for the UAE economy, and are used in foreign financial transactions, and at the same time they reflect the strength of the state's financial position.
Funding expansion
The source emphasized that government deposits are also an important source for the stability of the banking sector, and banks rely on them to expand lending and finance various economic sectors.
And he indicated that the increase in the value of these deposits and their growth is mainly due to the surpluses derived from the rise in oil prices, government revenues, and the ministries’ incomes from fees, services, and others.
He pointed out that the solvency of UAE banks, and the strength of the financial sector in general, enhance the classification of the UAE in the global financial community, and raise the confidence of both domestic and foreign investors in the country's market.
criticism
Data issued by the Central Bank showed an increase in cash circulating outside banks at the end of last October, reaching 99.6 billion dirhams, compared to 98 billion dirhams at the end of September, while cash in banks decreased to 16.1 billion dirhams at the end of October, compared to 17.1 billion at the end of September.
• 27 billion dirhams increase in government deposits within a month.
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