Liquid assets in UAE banks increase to Dhs486.58bn in Q1 2021

Liquid assets held by UAE-based banks increased 2.6 per cent to Dhs486.58bn in Q1 2021 from Dhs474.136bn in the last quarter of last year, according to the UAE Central Bank’s Core Financial Soundness Indicators report, released on Monday.

Liquid assets accounted for 15.9 per cent of the total assets by the end of the reference quarter, according to the report, official news agency WAM reported.

Liquid assets consist of eligible liquid assets (cash in hand, banks’ liquid assets at the Central Bank and eligible bonds/ sukuks as prescribed by CBUAE regulation) interbank placements; and interbank lending covered by repurchase agreements per the FSI Compilation Guide issued by IMF. Total assets are net off specific provision.

Meanwhile, the foreign assets held by the UAE Central Bank increased to Dhs392.4bn by the end of Q1 2021, a quarter-on-quarter increase of 1.1 per cent.

Read: UAE Central Bank foreign assets reach Dhs392.4bn by end of Q1 2021

In March this year, the governor of the Central Bank said that the overall liquidity of the nation’s banking system had returned to pre-Covid levels.

Read more: Overall liquidity in UAE banking system back to pre-Covid levels – Central Bank

Monday, March 15, also marked a year since the central bank unveiled its Dhs100bn economic stimulus package, the Targeted Economic Support Scheme (TESS), to help businesses counter the economic fallout of the Covid-19 pandemic and increase liquidity within the banking system.

Read: UAE Central Bank announces Dhs100bn package to counter Covid-19

It included Dhs50bn of zero-interest, collateralised loans for UAE-based banks and Dhs50bn funds freed up from banks’ capital buffers.