Central Bank data show deposits rose by 14.3 per cent in March compared with the same month last year to Dh1.1 trillion. Andrew Parsons / The National
Central Bank data show deposits rose by 14.3 per cent in March compared with the same month last year to Dh1.1 trillion. Andrew Parsons / The National

Big opportunities with lower interest rates

After remaining stubbornly high over the past two years, interest rates in the UAE are finally beginning to come down and the lower cost of borrowing should ultimately contribute to strengthening growth in the economy.

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Last Updated: May 17, 2011

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The financial system has notably received substantial inflows of liquidity in the first part of this year, which have served to push interest rates and credit spreads down.

One of the most visible signs of this has been the easing in Emirates interbank offered rates (Eibor), which serve as an important benchmark for pricing many corporate loans, funding operations and other borrowings.

The three-month Eibor began to head lower early last month. After remaining largely unchanged since October at about 2.13 per cent, it finished last month below 2 per cent.

Many observers follow the spread between Eibor and US dollar London interbank offered rates (Libor) as a gauge of local money market conditions.

Since the dirham is pegged to the dollar, economic theory says the interest rates for these two countries should be linked as well, with any difference representing idiosyncratic local market conditions.

Thus the difference between Eibor and US dollar Libor can be seen as a measure of the liquidity/credit premium in the local interbank market compared with the dollar funding market in the US.

The spread between these two benchmark rates in the three-month tenor has fallen from 185 basis points earlier in the year to less than 170 points in the early part of this month, and has plenty of room to fall further.

It is useful to examine the broader monetary backdrop. Increased liquidity in the banking system has been the primary driver of changing conditions, with strong growth in bank deposits.

Central Bank data show deposits rose by 14.3 per cent to Dh1.1 trillion (US$300.85bn) in March compared with March last year. Deposits were up 5.3 per cent in the first three months of the year alone.

This has helped to push banks' loan-to-deposit (LTD) ratios lower. The ratio for the banking sector as a whole fell below 100 per cent in October for the first time since 2007, meeting the target threshold set by the Central Bank.

Continued improvement in this measure over the following months has helped to restore confidence in the development of a sustainable trend, and the LTD ratio fell further in March to 94.8 per cent.

As the supply of deposit funding demonstrated sustained gains, this put downward pressure on the market price for deposits (that is, interest rates paid), and banks began lowering rates they pay on deposits from the early part of this year.

By mid-March, the lower rates gave investors incentive to look elsewhere to generate higher yields. About the same time consensus built regional political unrest had stabilised. These conditions created demand for local bonds. Ample liquidity from local investors, improving liquidity ratios in banks and a rally in local credit all set the stage for the drop in Eibor last month. Continued pressure from these factors should sustain the downward momentum in interbank rates over the coming months.

At the same time, the supply of funds available and an improving economic backdrop should spur businesses to raise funds in the local market to finance expansion.

So far this year, there have been three large bond issues in the UAE.

Emaar raised $500 million in a sukuk sale announced in January. The International Petroleum Investment Company successfully sold €2.5bn (Dh12.97bn) and £550m (Dh3.27bn) during challenging market conditions in early March, and Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, sold $1.5bn last month.

Conditions appear optimal for further issuances, with credit spreads much tighter than a couple of months ago and US dollar interest rates near their lows for the year.

Despite rising liquidity and an increase in money supply, growth in bank loans and advances has been slow and has remained subdued since in late 2008. After some signs of a gradual pickup in bank credit last year, loan growth stagnated towards the end of it.

There have been green shoots in the first couple of months of this year, although loans were still up only 2.5 per cent in March compared with March last year.

But continued downward pressure on Eibor should eventually feed into stronger credit growth. At a sector level, a few areas have recently demonstrated growth.

Increases in credit to heavy industry and personal loans for business purposes have shown signs of nascent growth, according to recent data from the Central Bank.

The latter augurs well for optimism among small and medium-sized businesses, an important engine of economic growth. In short, recent moves in Eibor and bond yields are a reflection of opportunities to earn relatively high rates of return in local fixed income markets.

The scope for further falls in rates should reveal itself in greater opportunities for companies to raise money more cheaply, and for these benefits to filter through to consumers and businesses.

Tim Fox is the head of research and chief economist at the global markets and treasury division of Emirates NBD, but is writing here in a personal capacity


Engine: 4-litre V8 twin-turbo
Power: 630hp
Torque: 850Nm
Transmission: 8-speed Tiptronic automatic
Price: From Dh599,000
On sale: Now

Tales of Yusuf Tadros

Adel Esmat (translated by Mandy McClure)



Round 1: Beat Leolia Jeanjean 6-1, 6-2
Round 2: Beat Naomi Osaka 7-6, 1-6, 7-5
Round 3: Beat Marie Bouzkova 6-4, 6-2
Round 4: Beat Anastasia Potapova 6-0, 6-0
Quarter-final: Beat Marketa Vondrousova 6-0, 6-2
Semi-final: Beat Coco Gauff 6-2, 6-4
Final: Beat Jasmine Paolini 6-2, 6-2

Mercedes V250 Avantgarde specs

Engine: 2.0-litre in-line four-cylinder turbo

Gearbox: 7-speed automatic

Power: 211hp at 5,500rpm

Torque: 350Nm

Fuel economy, combined: 6.0 l/100 km

Price: Dh235,000

Indoor cricket in a nutshell

Indoor Cricket World Cup - Sep 16-20, Insportz, Dubai

16 Indoor cricket matches are 16 overs per side

8 There are eight players per team

9 There have been nine Indoor Cricket World Cups for men. Australia have won every one.

5 Five runs are deducted from the score when a wickets falls

4 Batsmen bat in pairs, facing four overs per partnership

Scoring In indoor cricket, runs are scored by way of both physical and bonus runs. Physical runs are scored by both batsmen completing a run from one crease to the other. Bonus runs are scored when the ball hits a net in different zones, but only when at least one physical run is score.


A Front net, behind the striker and wicketkeeper: 0 runs

B Side nets, between the striker and halfway down the pitch: 1 run

C Side nets between halfway and the bowlers end: 2 runs

D Back net: 4 runs on the bounce, 6 runs on the full

The specs

Engine: 6-cylinder, 4.8-litre
Transmission: 5-speed automatic and manual
Power: 280 brake horsepower
Torque: 451Nm
Price: from Dh153,00
On sale: now

The Roundup : No Way Out

Director: Lee Sang-yong
Stars: Don Lee, Lee Jun-hyuk, Munetaka Aoki
Rating: 3/5


Stage 7:
1. Adam Yates (GBR) UAE Team Emirates – 3hrs 29min 42ses
2. Remco Evenepoel (BEL) Soudal Quick-Step – 10sec
3. Geoffrey Bouchard (FRA) AG2R Citroen Team – 42sec
General Classification:
1. Remco Evenepoel (BEL) Soudal Quick-Step
2. Lucas Plapp (AUS) Ineos Grenaders – 59se
3. Adam Yates (GBR) UAE Team Emirates –60sec
Red Jersey (General Classification): Remco Evenepoel (BEL) Soudal Quick-Step
Green Jersey (Points Classification): Tim Merlier (BEL) Soudal Quick-Step
White Jersey (Young Rider Classification): Remco Evenepoel (BEL) Soudal Quick-Step
Black Jersey (Intermediate Sprint Classification): Edward Planckaert (FRA) Alpecin-Deceuninck


Company name: Almouneer
Started: 2017
Founders: Dr Noha Khater and Rania Kadry
Based: Egypt
Number of staff: 120
Investment: Bootstrapped, with support from Insead and Egyptian government, seed round of
$3.6 million led by Global Ventures


Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Emirates exiles

Will Wilson is not the first player to have attained high-class representative honours after first learning to play rugby on the playing fields of UAE.

Jonny Macdonald
Abu Dhabi-born and raised, the current Jebel Ali Dragons assistant coach was selected to play for Scotland at the Hong Kong Sevens in 2011.

Jordan Onojaife
Having started rugby by chance when the Jumeirah College team were short of players, he later won the World Under 20 Championship with England.

Devante Onojaife
Followed older brother Jordan into England age-group rugby, as well as the pro game at Northampton Saints, but recently switched allegiance to Scotland.

Important questions to consider

1. Where on the plane does my pet travel?

There are different types of travel available for pets:

  • Manifest cargo
  • Excess luggage in the hold
  • Excess luggage in the cabin

Each option is safe. The feasibility of each option is based on the size and breed of your pet, the airline they are traveling on and country they are travelling to.


2. What is the difference between my pet traveling as manifest cargo or as excess luggage?

If traveling as manifest cargo, your pet is traveling in the front hold of the plane and can travel with or without you being on the same plane. The cost of your pets travel is based on volumetric weight, in other words, the size of their travel crate.

If traveling as excess luggage, your pet will be in the rear hold of the plane and must be traveling under the ticket of a human passenger. The cost of your pets travel is based on the actual (combined) weight of your pet in their crate.


3. What happens when my pet arrives in the country they are traveling to?

As soon as the flight arrives, your pet will be taken from the plane straight to the airport terminal.

If your pet is traveling as excess luggage, they will taken to the oversized luggage area in the arrival hall. Once you clear passport control, you will be able to collect them at the same time as your normal luggage. As you exit the airport via the ‘something to declare’ customs channel you will be asked to present your pets travel paperwork to the customs official and / or the vet on duty. 

If your pet is traveling as manifest cargo, they will be taken to the Animal Reception Centre. There, their documentation will be reviewed by the staff of the ARC to ensure all is in order. At the same time, relevant customs formalities will be completed by staff based at the arriving airport. 


4. How long does the travel paperwork and other travel preparations take?

This depends entirely on the location that your pet is traveling to. Your pet relocation compnay will provide you with an accurate timeline of how long the relevant preparations will take and at what point in the process the various steps must be taken.

In some cases they can get your pet ‘travel ready’ in a few days. In others it can be up to six months or more.


5. What vaccinations does my pet need to travel?

Regardless of where your pet is traveling, they will need certain vaccinations. The exact vaccinations they need are entirely dependent on the location they are traveling to. The one vaccination that is mandatory for every country your pet may travel to is a rabies vaccination.

Other vaccinations may also be necessary. These will be advised to you as relevant. In every situation, it is essential to keep your vaccinations current and to not miss a due date, even by one day. To do so could severely hinder your pets travel plans.

Source: Pawsome Pets UAE

Getting there and where to stay

Etihad Airways operates seasonal flights from Abu Dhabi to Nice Côte d'Azur Airport. Services depart the UAE on Wednesdays and Sundays with outbound flights stopping briefly in Rome, return flights are non-stop. Fares start from Dh3,315, flights operate until September 18, 2022. 

The Radisson Blu Hotel Nice offers a western location right on Promenade des Anglais with rooms overlooking the Bay of Angels. Stays are priced from €101 ($114), including taxes.

Company profile

Company name: Nestrom

Started: 2017

Co-founders: Yousef Wadi, Kanaan Manasrah and Shadi Shalabi

Based: Jordan

Sector: Technology

Initial investment: Close to $100,000

Investors: Propeller, 500 Startups, Wamda Capital, Agrimatico, Techstars and some angel investors

Visit Abu Dhabi culinary team's top Emirati restaurants in Abu Dhabi

Yadoo’s House Restaurant+& Cafe

For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.

Golden Dallah

For the cappuccino, luqaimat and aseeda.

Al Mrzab Restaurant

For the shrimp murabian and Kuwaiti options including Kuwaiti machboos with kebab and spicy sauce.

Al Derwaza

For the fish hubul, regag bread, biryani and special seafood soup. 

Intercontinental Cup

Namibia v UAE Saturday Sep 16-Tuesday Sep 19

Table 1 Ireland, 89 points; 2 Afghanistan, 81; 3 Netherlands, 52; 4 Papua New Guinea, 40; 5 Hong Kong, 39; 6 Scotland, 37; 7 UAE, 27; 8 Namibia, 27

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John Cena pinned Triple H in a singles match

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Seth Rollins retains the Intercontinental title against The Miz, Finn Balor and Samoa Joe

AJ Styles remains WWE World Heavyweight champion after he and Shinsuke Nakamura are both counted out

The Undertaker beats Rusev in a casket match

Brock Lesnar retains the WWE Universal title against Roman Reigns in a steel cage match

Braun Strowman won the 50-man Royal Rumble by eliminating Big Cass last


Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)


Developer: SCE Studio Cambridge
Publisher: Sony Computer Entertainment
Console: PlayStation, PlayStation 4 and 5
Rating: 3.5/5

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