UAE Central Bank reports 12% rise in foreign currency assets

Rise in current account balances, deposits with the foreign banks buoys year-on-year surge

The foreign assets of the central bank reached Dh326 billion at the end January, up from Dh290.7bn recorded for the same month in 2017. The National
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Total foreign currency assets held by the Central Bank of the UAE abroad surged 12 per cent annualy in January as current account balances rose and deposits with foreign banks strengthened.

The foreign assets of the central bank reached Dh326 billion at the end January, up from Dh290.7bn recorded for the same month in 2017, UAE’s official news agency WAM reported, citing figures from the UAE’s banking regulator.

The surge in the central bank's foreign assets was driven by the rise in current account balances and deposits with banks abroad to Dh254.9bn in January 2018, from Dh129.8bn same time last year. The foreign assets exclude the central bank's Reserve Tranche Position and Special Drawing Rights holdings with the International Monetary Fund. Gross bank assets, including bankers' acceptances, recorded a month-on-month slide of 0.3 per cent, falling from Dh2.695 trillion at the end of December 2017 to Dh2.688tn at the end of January 2018, figures showed.

Gross credit in the banking system, increased by 0.5 per cent for the same period to Dh1.588tn. Total bank deposits, however, decreased by Dh5.8bn during January, mainly due to Dh5.2bn and Dh600 million drops in resident deposits and non-resident deposits, respectively, according to the data posted on the central bank's website.


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Relatively higher oil prices and stronger support from the government is also expected to support deposits while greater technology adoption by banks will help the lenders perform more efficiently this year.

For the month under review, government deposits, monetary deposits and quasi monetary deposits stood at Dh203.7bn, Dh429.7bn and Dh779bn, respectively.

The monetary base of the central bank climbed from Dh325.4bn at the end of January 2017 to Dh358.1bn at the end of January 2018, which includes reserve requirements at Dh121.1bn, certificates of deposit at Dh132.4bn, currency issued at Dh83.2bn and banks current accounts at Dh21.1bn, according to the data.