UAE says it is winding down pandemic stimulus as economy recovers

The UAE has begun winding down an economic support programme launched in response to the coronavirus pandemic as the economy shows signs of gradual recovery, the central bank said in a statement.

The reduced reserve requirements for banks won’t change for now and neither will the lower loan-to-value ratio required for first-time home buyers seeking mortgage loans, the bank said.

The loan deferral component of the Targeted Economic Support Scheme will expire by the end of 2021 with financial institutions able to carry on tapping a collateralised Dhs50bn ($13.6bn) liquidity facility until the middle of 2022, in line with earlier guidance.

Banks can draw on the facility to provide new loans and financing to individuals, small and medium-sized enterprises, and other private corporates affected by the virus fallout.

Read: UAE Central Bank extends Targeted Economic Support Scheme until June 2021