Dubai September 12 2024: The Central Bank of the UAE (CBUAE) revealed that total gross banks’ assets, including bankers’ acceptances, rose by 0.5 percent from AED4,287.0 billion at the end of May 2024 to AED4,310.2 billion at the end of June 2024.
In its Monetary and Banking Developments for June 2024, the Central Bank said Gross credit grew by 1.1 percent from AED2,077.7 billion at the end of May 2024 to AED2,100.9 billion at the end of June 2024.
Gross credit rose due to increases in domestic credit by 0.8 percent and in foreign credit by 2.9 percent.
The bank stated that domestic credit expansion was due to increases in credit to the public sector (government-related entities) and the private sector by 1.4 percent and 1.0 percent, respectively, offsetting the 1.1 percent and 0.6 percent reductions in credit to the government sector and credit to the non-banking financial institutions.
Banks’ deposits rose by 0.5 percent, from AED2,678.2 billion at the end of May 2024 to AED2,692.5 billion at the end of June 2024. The growth in total bank deposits was due to the rise in non-resident deposits by 8.4 percent, overshadowing the fall in resident deposits by 0.1 percent.
According to the CBUAE, resident deposits fell as a result of reductions in; government sector deposits by 3.0 percent and in government-related entities deposits by 0.1 percent. Whereas, private sector deposits increased by 0.4 percent and non-banking financial institutions deposits rose by 6.6 percent, at the end of June 2024.
Monetary and Banking Developments – June 2024
The Central Bank announced that the money supply aggregate M1 increased by 0.6 percent, from AED879.2 billion at the end of May 2024 to AED884.1 billion at the end of June 2024. This was due to AED7.3 billion rise in monetary deposits, overriding AED2.4 billion reduction in currency in circulation outside banks.
The money supply aggregate M2 rose by 0.4 percent, from AED2,160.3 billion at the end of May 2024 to AED2,169.4 billion at the end of June 2024. M2 increased because of an elevated M1 and AED4.2 billion rise in Quasi-Monetary Deposits.
The money supply aggregate M3 also increased by 0.1 percent, from AED2,629.7 billion at the end of May 2024 to AED2,632.0 billion at the end of June 2024. M3 expanded due to the growth in M2, overshadowing the AED6.8 billion reduction in government deposits.
The monetary base shrank by 0.3 percent, from AED727.1 billion at the end of May 2024 to AED725.0 billion at the end of June 2024. The fall in the monetary base was driven by reductions in; currency issued by 2.3 percent, banks and OFCs’ current accounts and overnight deposits of banks at CBUAE by 42.2 percent and monetary bills and Islamic certificates of deposit by 0.5 percent. Meanwhile, reserve account increased by 37.3 percent.
Foreign Assets
The total foreign assets of the Central Bank of the UAE exceeded the AED770 billion mark by the end of June for the first time in its history, according to the latest bank statistics, increasing by 0.5 percent from AED766.73 billion in May to AED770.6 billion in June 2024, an increase equivalent to AED3.88 billion.
The central bank’s foreign assets increased year-on-year (YoY) by 30 percent to AED592.11 billion in June 2023, an increase of about AED178.5 billion.
The Central Bank statistics attributed the rise in the volume of foreign assets to an increase in bank balances and deposits with banks abroad to AED533.86 billion, while foreign securities increased to AED179.72 billion, and other foreign assets rose to more than AED57 billion by the end of June.
The Central Bank stated that its foreign assets do not include its Reserve Tranche Position (RTP) and Special Drawing Rights (SDR) Holdings with the International Monetary Fund (IMF).
Balance Sheet
The balance sheet of the Central Bank of the UAE reached AED806.39 billion at the end of June, a YoY increase of 24.2 percent compared to AED649.4 billion in June 2023, an increase of AED157 billion YoY.
According to the statistics, the central bank’s balance sheet distributed AED352.79 billion for cash and bank balances in June, along with investments of AED206.43 billion, AED208.78 billion for deposits, AED1.71 billion for loans and advances, and AED36.68 billion for other assets.
On the liabilities and capital side, the balance sheet distributed AED396.72 billion for current and deposit accounts, AED226.93 billion for monetary bills and Islamic certificates of deposit, AED145.36 billion for currency notes and coins issued, AED26.56 billion for capital and reserves, and AED10.82 billion for other liabilities.
