The regulator is working hard to ensure a continuous flow of credit, helping affected individuals and businesses overcome temporary debt repayment difficulties

The UAE’s gross domestic product will grow 2.4% this year and 3.8% in 2022 as the economy recovers from restrictions imposed during the Covid pandemic, the central bank said on Thursday.

In the non-oil sector, GDP will grow by around 4% in the current year as well as next year, the UAE Central Bank said in its financial stability report.

“The targeted economic support system [Tess] has been effective in mitigating the risks posed by the pandemic by ensuring a continuous flow of credit and helping affected individuals and businesses overcome temporary debt repayment difficulties, ”said apex bank.

The regulator extended access to the zero-cost liquidity facility of MAD 50 billion under Tess until the end of June 2022 to help cushion the impact of the Covid-19 pandemic on the economy.

“In line with the UAE’s robust mitigation measures, including a rapid deployment of Covid-19 vaccines, the central bank has worked tirelessly to ensure that vital sectors of the country’s economy are able to withstand The central bank’s introduction of Tess came at the right time, ensuring that banks could ease funding and liquidity pressures and maintain their lending capacity, which helped provide needed support to individuals. and businesses, ”Central Bank Governor Khaled Mohamed Balama said, adding that support continues as most of the support measures provided by the central bank will remain in place until 2021.

“Together with the financial sector of the United Arab Emirates, we are paving the way for a gradual economic recovery and remain vigilant in the face of the challenges ahead, while continuing to maintain the financial and monetary stability of the United Arab Emirates,” said the governor.

The report shows that the UAE banking sector remains resilient, with sustained lending capacity. The effects of the pandemic have resulted in increased bank depreciation charges, lower operating income and lower profitability. Overall capital and liquidity buffers remain well above regulatory requirements.

In addition, the central bank has carried out frequent top-down solvency and liquidity stress tests using a number of hypothetical adverse scenarios at different stages of the Covid-19 crisis.

[email protected]

The stress test results indicated that the UAE’s banking system has strong capital and liquidity cushions to withstand large hypothetical shocks. A separate section of the report is devoted to climate risk, which is at the forefront of regulatory concerns both globally and in the UAE.

The report highlights the importance for UAE banks to consider integrating climate change risk into their lending and operational processes. It contains detailed information on the payment systems operated by the central bank as well as the benefits and risks posed by new technologies and cybersecurity.

The report stresses the importance of proper management of the risks associated with new technologies and increased competition from new entrants into the market. It is important to continue to focus on these risks as the UAE reinforces its role as the largest FinTech center in the Middle East. It also covers other key sectors of the UAE financial market, such as the insurance industry, financial companies, brokerage houses, and capital markets.

[email protected]lejtimes.com

Issac Jean

Editorial Director of Khaleej Times, is a well-connected Indian journalist and economic and financial commentator. He has worked in mainstream journalism in the United Arab Emirates for 35 years, including 23 years with the Khaleej Times. A graduate in English and a graduate in economics, he has won more than twenty awards. Acclaimed for his genuine and insightful analysis of global and regional business and economic trends, he is respected for his astute understanding of the local business scene.




Source link

About The Author

Al Worden

Related Posts

Leave a Reply

Your email address will not be published.