UAE Central Bank Boosts Anti-Coronavirus Stimulus to $70Bn

The central bank said the aggregate value of all capital and liquidity measures it adopted since March 14 is 256 billion dirhams. WAM

The UAEs’ central bank announced new measures to guarantee liquidity in the banking system. This is in the face of the new coronavirus outbreak; boosting its stimulus to a total of $70bn from a previously announced $27bn package.

The central bank said on Sunday the aggregate value of all capital and liquidity measures it adopted since March 14 is AED256bn ($69.70bn). On March 14 it had launched AED100bn ($27bn) worth of measures.

The central bank’s governor; Abdulhamid Saeed, appointed last week, said the additional measures will effectively relieve the pressure on financial institutions. This also allows them to continue to carry out their crucial role as the backbone of the economy. While offering the required relief and continued access to funding for businesses and households.

Halving Banks’ reserve requirements

The UAE regulator said on Sunday it halved banks’ reserve requirements for demand deposits to 7% from 14%. This will inject about AED61bn of liquidity to support banks’ lending and liquidity management.

It extended the duration of a previously announced deferral of loan principal and interest payments for customers until the end of the year, and said banks participating in the scheme can benefit from a capital buffer relief until December 2021. The value of the capital buffer relief is AED50bn.

Zero-cost funding facility

Banks have a “zero-cost funding facility” against collateral until the end of this year – a program also worth AED50bn.

Overall measures aimed at relaxing banks’ liquidity buffer requirements reached AED95bn, the regulator said.

Meanwhile, the Ministry of Human Resources and Emiratization, in cooperation with the Federal Authority for Identity and Citizenship, the Ministry of Foreign Affairs and International Cooperation, the General Civil Aviation Authority, and the National Emergency Crisis and Disasters Management Authority, has launched the ‘Early Leave’ initiative.

The initiative aims to enable residents who work in the private sector and wish to return to their home countries to do so during the period of precautionary measures undertaken in the UAE to contain the spread of the coronavirus.

Employees are to submit their annual leave dates or agree with their employers on unpaid leave.