The UAE central bank has its economic stimulus package will now reach 256 billion dirhams ($69 billion) to mitigate the effects of the coronavirus pandemic, according to a statement.
The bank reduced the reserves requirement for demand deposits by 50 percent to 7 percent, down from 14 percent. This measure will inject liquidity of around 61 billion UAE dirhams, the bank said in the statement.
The overall economic stimulus plan announced by the central bank has also been extended until the end of 2020.
Banks that are participating in the program will be able to access capital buffer relief of 50 billion UAE dirhams, and the zero-cost funding facility against collateral has been extended until the end of 2020, the value of this program is 50 billion UAE dirhams.
Basel III capital standard implementation, which are a set of international regulatory measures agreed upon after the financial crisis in 2008 designed to reduce risk, increase supervision, and improve the regulation of the banking sector, has been delayed until March 2021.
“The additional measures announced today will effectively relieve the pressure on financial institutions, allowing 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,” said the Governor of the central bank, Abdulhamid Saeed.
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