UAE banking sector’s net international reserves stand at Dh1.104 trillion

YOUSSEF AL-BUSTANJI (ABU DHABI)

The net international reserves of the UAE banking sector, including the Central Bank of the UAE (CBUAE) and operating banks in the country, increased by Dh243 billion, to reach Dh1.104 trillion ($301 billion) by the end of November 2023, compared with Dh861 billion at the end of December 2022, marking a growth of 28.2% during the first 11 months of the past year, according to data from the Central Bank of the UAE.

The data shows an increase in the net international reserves of the CBUAE by Dh139 billion, representing a growth of 29%, reaching Dh616 billion (approximately $168 billion) by the end of November 2023. This is compared to Dh477 billion (approximately $130 billion) at the end of December 2022.

The net international reserves of the operating banks increased by Dh104 billion, growing by 27% to reach Dh488 billion by the end of November last year, compared with Dh384 billion at the end of 2022.According to statistical data from the CBUAE, the net international reserves of the banking sector surpass the mandatory minimum required, amounting to Dh125 billion at the end of November 2023. As per the monetary policy of the UAE, the UAE dirham has been pegged to the US dollar at an exchange rate of Dh3.6725 per dollar since 1980, remaining unchanged for almost 44 years.

The increase in the net international reserves of the CBUAE is a result of the improved competitiveness of the national economy in its financial and trade relations with foreign markets. The rise in net reserves is an indicator of an increase in the surplus in the balance of payments.

In addition, the data indicates that the value of cash circulated outside banks in the UAE market increased by approximately Dh13 billion, representing a growth of around 12.7%, reaching Dh115 billion by the end of November 2023, compared with Dh102 billion at the end of December 2022. The increase in cash circulation outside banks is a result of an increase in the number of employees and workers in the local market, a rise in the number of new companies, and, ultimately, an increase in the total population in the UAE.

Furthermore, fixed-term deposits in the UAE dirham increased by Dh108.5 billion, reaching Dh645 billion by the end of November 2023, compared with Dh536.5 billion at the end of 2022, with a growth rate of 20.2% during the comparison period. Fixed-term deposits in foreign currencies also increased by Dh63 billion, growing by 14.6% to reach Dh493 billion by the end of November 2023, compared with Dh430 billion at the end of December 2022.

On the other hand, the gold balance of the CBUAE increased by Dh1.9 billion, reaching Dh17.93 billion by the end of November 2023, with a growth of 11.8% during the comparative period.

Meanwhile, data indicates that banks injected around Dh32 billion in new loans and facilities for the consumer loans sector for individuals, growing by 8.3% to reach a balance of Dh416 billion by the end of November 2023, compared with its balance of Dh384 billion at the end of 2022.

The balance of personal loans directed towards business financing remained stable at Dh92 billion without significant changes during the comparative period. Banks also provided around Dh17 billion in new loans for the transport, storage, and communication sector, increasing its balance to approximately Dh93 billion by the end of November 2023, compared with Dh76 billion at the end of December 2022.