UAE bank credit increases in July

Gross credit by the UAE banks grew in July, reflecting increase business activity in the country while deposit by non-residents increased last month. According to the UAE Central Bank data, gross credit increased by 0.2 per cent, rising from Dh1,591.3 billion at the end of June 2017 to Dh1,594.5 billion at the end of July 2017. 
The Emirates NBD Dubai Economy Tracker Index released earlier this month signalled robust expansion in the non-oil private sector. Output (61.0) and new orders (62.0) increased sharply in July. Firms attributed the rise in business activity to "favourable economic conditions and more projects". 
The Central Bank data disclosed that total bank deposits also increased by Dh3.1 billion during July mainly due to Dh5 billion increase in non-resident deposits, overriding Dh1.9 billion fall in resident deposits. Total bank assets decreased by 0.8 per cent, falling from Dh2,654.3 billion at the end of June 2017 to Dh2,632.7 billion at the end of July 2017. 
 
Money supply 
Money supply (M1) fell in the UAE in July 2017 as compared to previous month due to drop in deposits, according to the UAE Central Bank data. M1, which includes physical money both paper and coin, in the UAE fell by 1.9 per cent to Dh497.5 billion in July as compared to Dh507.1 billion in June.
Monetary deposit last month fell by Dh6.9 billion. While M2 - which includes M1 plus short-term time deposits in banks and 24-hour money market funds, fell marginally 0.2 per cent from Dh1,267.1 billion at the end of June 2017 to Dh1,264.4 billion at the end of last month.
Similarly, Money Supply aggregate M3 also decreased by 0.3 per cent from Dh1,463.1 billion at the end of June 2017 to Dh1,459.1 billion at the end of July 2017. M3 includes M2 as well as large time deposits, institutional moneymarket funds, short-term repurchase agreements and other larger liquid assets. M3 mainly fell due to a decrease in M1 and Dh1.3 billion reduction in government deposits. - waheedabbas@khaleejtimes.com