CBUAE issues monetary and banking developments

The Central Bank announced that the Money Supply aggregate M1 decreased by 0.2%, from Dhs 799.3 billion at the end of October 2023 to Dhs 797.4 billion at the end of November 2023.

This was due to Dhs 4.9 billion fall in Monetary Deposits. Currency in Circulation Outside Banks increased by Dhs 3.0 billion during November 2023.

The Money Supply aggregate M2 rose by 0.7%, from Dhs 1,922.3 billion at the end of October 2023 to Dhs 1,935.4 billion at the end of November 2023. M2 rose due to Dhs 15.0 billion rise in Quasi-Monetary Deposits, overriding the diminished M1.

The Money Supply aggregate M3 also increased by 0.5%, fromDhs 2,376.7 billion at the end of October 2023 to Dhs 2,388.6 billion at the end of November 2023. M3 Increased because of an augmented M2, overshadowing theDhs 1.2 billion reduction in Government Deposits.

The Monetary Base expanded by 2.9%, from Dhs 596.9 billion at the end of October 2023 to AED 614.0 billion at the end of November 2023. The main driver of this increase in the Monetary Base was the rise in Currency Issued by 3.5%, in Banks & OFCs’ Current Accounts & Overnight Deposits of Banks at CBUAE by 19.1% and in Monetary Bills & Islamic Certificates of Deposit by 1.1%.

Gross banks’ assets, including bankers’ acceptances, rose by 0.8%, from Dhs 3,995.7 billion at the end of October 2023 to AED 4,026.0 billion at the end of November 2023.

Gross credit increased by 1.0% from Dhs 1,974.2 billion at the end of October 2023 to Dhs 1,994.5 billion at the end of November 2023. Gross Credit rose due to rises in Domestic Credit by 0.8% and in Foreign Credit by 2.8%.

Domestic Credit grew because of 5.0%, 2.0% and 6.0% increases in credit to the Public Sector (Government Related Entities), Private Sector and to Non-Banking Financial Institutions, respectively.

Total Bank Deposits fell by 0.5%, reducing from Dhs 2,455.4 billion at the end of October 2023 to Dhs 2,444.3 billion at the end of November 2023. The decline in Total Bank Deposits was due to a decrease in Non-Resident Deposits by 9.3%, superseding an increase of 0.4% in Resident Deposits.

Resident Deposits rose owing to increase in Private Sector Deposits by 1.9%. While, Government Sector deposits and Public Sector (Government Related Entities) Deposits fell by 0.5% and 7.9%, respectively and Non-Banking Financial Institutions Deposits remained constant.

WAM