UAE doubles stimulus to counter coronavirus impact

Published
11
A deserted street in Dubai, UAE amid the coronavirus outbreak.  — AFP
A deserted street in Dubai, UAE amid the coronavirus outbreak. — AFP

The Central Bank of the United Arab Emirates on Sunday said it has doubled to $70 billion a stimulus package to support the Gulf state's economy amid the coronavirus pandemic.

"The aggregate value of all capital and liquidity measures adopted by the CBUAE since 14 March 2020 has reached 256b dirhams ($70b)," the central bank said in a statement.

Last month, oil-rich UAE announced stimulus worth $35b that included aid to the banking system, facilities for loans and injecting funds into the bourses.

Read: How destructive have coronavirus and oil price war been for the world economy?

Most of the new measures focused on easing financial and liquidity requirements for banks to free up cash for lending.

In the new measures, the central bank reduced by half to 7.0 per cent the reserves banks are required to keep for demand deposits, which can be withdrawn by clients anytime.

This will allow for some $16.6b in liquidity to be used in new bank lending, the central bank said.

The regulator's new measures also allow banks to defer payment of loans for companies and clients until the end of 2020.

"The additional measures announced today will effectively relieve the pressure on financial institutions ... offering the required relief and continued access to funding for businesses and households," newly-appointed governor Abdulhamid Saeed said.

The UAE, where 1,505 coronavirus cases and 10 deaths have been reported, has introduced strict measures including halting travel and closing shopping malls and entertainment venues.

On Saturday night, Dubai, one of the seven emirates making up the UAE, announced a two-week lockdown in which it will carry out tests in densely populated areas.

The bourse of Dubai has led the slide of the Gulf stock markets, shedding 36pc in the first quarter, most of it in March. Its UAE sister bourse in Abu Dhabi dropped by 26.4pc.

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Debt that stays
30 Jul, 2026

Debt that stays

THE power sector’s circular debt grew by Rs61bn in the last fiscal year, taking the total to roughly Rs1.67tr from...
HIV warning
30 Jul, 2026

HIV warning

THE HIV infections detected around two SESSI-run hospitals in Karachi demand far more than another hurried committee...
End trafficking
30 Jul, 2026

End trafficking

MODERN slavery, in the form of human trafficking, is among the state’s gravest failures. Scores of Pakistanis are...
AJK elections
29 Jul, 2026

AJK elections

CONSIDERING the political unrest that has rocked Azad Jammu and Kashmir in the recent past, free and fair general...
Still vulnerable
29 Jul, 2026

Still vulnerable

THE State Bank’s decision to hold the policy rate at 11.5pc is a prudent response to the heightened risks the...
Guarding the past
29 Jul, 2026

Guarding the past

THE return of 513 smuggled archaeological artefacts from the US is a welcome homecoming for objects that should ...