UAE Central Bank Offers Extra Liquidity To Banks

Sponsored Links

Sunday, the Abu Dhabi-based Central Bank of the United Arab Emirates said it will provide foreign and local banks with extra liquidity. Banks can avail a special additional liquidity facility linked to their current accounts at the central bank at a rate of 50 basis points above the three- month local benchmark interest rate. Further, the central bank said it "stands behind" local and foreign banks.

The International Monetary Fund welcomed the decision. The IMF said, "We welcome today's announcement by the Central Bank of the UAE making available to banks a special additional liquidity facility." "We look forward to further clarification by the authorities towards a cooperative mechanism to address the issues between these debtors and their creditors," the lender added.

On November 26, the Dubai government had decided to restructure Dubai World after the company shocked creditors by requesting a standstill on all financing to it and its subsidiary Nakheel, the "palm island" developer. Dubai World had asked for a delay on maturities until at least May 30, 2010.

Sunday, the Abu Dhabi-based Central Bank of the United Arab Emirates said it will provide foreign and local banks with extra liquidity. (Market News Provided by RTTNews)