DUBAI (Reuters) – The UAE central bank said on Monday it has extended until June 2021 the period of applicability of key elements of a stimulus package to support retail and corporate bank customers and accelerate recovery from the coronavirus pandemic.
In March, the CBUAE launched $ 70 billion in capital and liquidity measures as part of a Targeted Economic Support Program (TESS) aimed at boosting the economy during the coronavirus crisis.
The CBUAE will extend by six months, starting in January, the duration of a 50 billion dirhams (13.6 billion dollars) “zero cost facility” aimed at facilitating liquidity management for banks through financing. guaranteed at zero cost.
“From January 1, 2021, banks and financial companies participating in TESS will be able to provide new loans and facilities to customers adversely affected by the pandemic” under the conditions set by the TESS program, he said in a statement. .
The UAE’s economy is expected to contract 6.6% this year, the International Monetary Fund (IMF) has estimated, as vital sectors such as transport and tourism have been hit hard by the coronavirus.
The fall in oil prices is weighing on the country’s finances, with the government expected to post a deficit of 9.9% of GDP, against 0.8% in 2019, according to the IMF.
“We believe this initiative will protect the economy from the impact of the pandemic and put us in an ideal position to recover once the pandemic is over,” said central bank governor Abdulhamid Saeed.
The IMF expects the UAE economy to return to 1.3% growth next year.
($ 1 = 3.6728 UAE dirhams)
Reporting by Davide Barbuscia; Editing by Toby Chopra, Kirsten Donovan