• Home
• /
• Local business

UAE Has No Liquidity Problem

The government has issued treasury bonds to cover the amount of the stimulus package given to the local banks recently, he stated.

Credit growth in the UAE will be no more than 10 per cent in 2009, he said. The UAE saw huge credit expansion recently with consumer credit rising 46 per cent in the first half of 2008.

“The UAE’s credit growth will be between 5 and 10 per cent, no more in 2009,” Suwaidi stated.

The banking sector will have to make adjustments and take necessary provisions, Suwaidi told reporters.

He said that in this slowing economic environment, banks should be able to meet credit demand since deposit growth remains at “double-digit” levels.

The Governor said that banking profits are expected to be less than last year.

“They will have to review, rethink and recalculate their positions and then decide on the next move. It’s an awakening moment from the shock,” he said.

Asked about any mergers and consolidations happening in coming months, in the wake of global crisis, Al Suwaidi said it depends on how the banks will perform. The Governor added that policy makers in the Gulf Arab region want to coordinate their interest rates, as most prepare for monetary union.

· business@khaleejtimes.com