ABU DHABI (WAM)
The Central Bank announced a decrease in money supply aggregate M1 by 2.5%, from Dh1,099.8 billion at the end of February 2026 to Dh1,072.7 billion at the end of March 2026.
The decrease was caused by a decrease in monetary deposits by 4.0%. Meanwhile, currency in circulation outside banks rose by 6.9%.
The money supply aggregate M2 increased by 0.4% in March 2026, rising from Dh2,856.8 billion at the end of February 2026 to Dh2,869.3 billion at the end of March 2026.
This growth was mainly driven by a Dh39.6 billion increase in Quasi-Monetary Deposits. Government Related Entities (GREs) deposits made the largest contribution, which grew by 16.3%.
However, the Corporate sector deposits decreased by 1.7%, Individuals’ deposits by 2.8% and Other Financial Corporations (OFC) deposits by 1.3%.
The positive contribution of the GREs to M2 was neutralised by the downward contribution of the private sector.
The money supply aggregate M3 increased by 1.6%, rising from Dh3,353.7 billion at the end of February 2026 to Dh3,406.8 billion at the end of March 2026.
Government sector deposits recorded a monthly increase of 8.2%, reaching Dh537.5 billion, and contributed positively to M3 growth by 1.3 p.p.
The monetary base decreased by 4.3%, from Dh918.6 billion at the end of February 2026 to Dh879.5 billion at the end of March 2026.
The decrease was caused by the decline in Reserve Requirements by 21.9% and Monetary Bills & Islamic Certificates of Deposit by 4.6%.
However, Banks & OFCs Current Accounts & Overnight Deposits of Banks increased by 32.7% and currency issued by 8.9%, which moderated the decline of overall aggregate.
Gross banks’ assets increased by 1.5% from Dh5,472.5 billion at the end of February 2026 to Dh5,556.5 billion at the end of March 2026.
Gross credit increased by 2.5%, rising from Dh2,630.7 billion at the end of February 2026 to Dh2,695.6 billion at the end of March 2026.
This overall growth was primarily supported by a Dh52.4 billion increase in domestic credit.
The main driver was credit to the Government sector, which rose by 6.9%, contributing 0.8 p.p. to overall domestic credit growth. It was followed by an increase in GREs by 6.0%, adding 0.9 p.p. and a positive contribution from credit to the private sector by 1.1%, which contributed 0.8 p.p.
Banks’ deposits increased by 1.4%, from Dh3,399.9 billion at the end of February 2026 to Dh3,446.0 billion at the end of March 2026.
The increase in banks’ deposits was driven mostly by the growth in resident deposits, which increased by 1.3%, reaching Dh3,138.8 billion (contributing 1.2 p.p.), while non-resident deposits increased by 1.8%, reaching Dh307.2 billion.
Within the resident deposits, the biggest contribution (1.6 p.p.) came from GREs, recording an increase by 16.3%, reaching Dh363.1 billion. Government sector deposits also increased by 9.0%, reaching Dh427.3 billion.
At the same time, private sector deposits decreased by 1.9% settling at Dh2,278.2 billion, and OFC deposits by 2.5 percent, settling at Dh70.2 billion at the end of March 2026.