UAE dollar supply drying up amid oil price weakness, says NBAD chief executive

'It’s not a crisis, but it is tightening,' said Alex Thursby in Abu Dhabi.

“There is a dollar shortage. It’s not a crisis, but it is tightening,” NBAD chief executive Alex Thursby said. Mona Al Marzooqi / The National

National Bank of Abu Dhabi, the UAE’ largest bank, said the supply of dollars in the country is drying up as the region grapples with the impact of oil trading around US$30 per barrel and credit downgrades.

“There is a dollar shortage,” chief executive Alex Thursby told reporters in Abu Dhabi on Wednesday. “It’s not a crisis, but it is tightening,” he said. Government deposits in the UAE slumped by more than $13 billion in a year after the drop in crude prices, the executive said on an earnings conference call in October.

Banks in the UAE, holder of the world’s sixth-largest oil reserves, are facing deteriorating conditions as lower crude leads to a decline in government spending, slower economic growth and falling asset quality, according to Standard & Poor’s. The UAEs’ banking sector has lost Dh56bn in government deposits since September 2014, of which NBAD’s share was Dh48bn, Mr Thursby said in October.

Even with the decline in oil, Thursby said he expects a “good” year for the bank.

More to follow.

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