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Central Bank Extends Repo Rate of 1% to One Month

ABU DHABI — The Central Bank of the UAE has extended the application of the official repo rate of one per cent from one week to one month in order to create more liquidity at a lower cost in the financial system.

In its efforts to pump in the much needed liquidity, the apex bank has also amended the eligibility requirement for repo transactions of Certificates of Deposits of 14 days remaining maturity issued by the central bank and owned by commercial banks.

“These changes will provide banks with increased liquidity at a lower cost,” said the Senior Executive Director of Treasury Department, while giving a presentation on the monetary position, during a meeting of the board of directors of the Central Bank of the UAE, that met on Wednesday. The details of the meeting were released on Saturday.

The Treasury Department chief further said that the Emirates Interbank Offered Rates, or EIBOR, established recently by the Central Bank of the UAE, has already resulted in bringing down the current market rates.

The central bank has established an EIBOR panel in the country consisting on 11 banks, he added.

The directors also reviewed the report submitted by the senior executive director of Banking Supervision and Examination Department regarding the banking indicators.

A presentation was made by the senior manager of the UAESWITCH Division on the system and the services it provides through GCC switches, in addition to projects aimed at the development of UAESWITCH.

The central bank directors also reviewed applications submitted by banks operating in the UAE to expand their businesses and open new branches, and reviewed applications to establish companies/ establishments to undertake financial activities and moneychanging business.

The board approved the applications, which fulfilled the terms as per the law and regulations.

The meeting was chaired by Khalil Mohammed Sharif Foulathi, Chairman of the Board, and attended by Dr Omar Mohammed Ahmed bin Sulaiman, Deputy Chairman, and Sultan bin Nasser Al Suwaidi, the Governor.

The other board members who were present on occasion included Younis Haji Khoori, Mubarak Rashid Al Mansouri, Hilal Khalfan bin Dhahir, Khalid Mohammed Salem Balama and Deputy Governor Mohamed Ali bin Zayed Al Falasi besides top officials of the central bank. 
— haseebhaider@khaleejtimes.com