Central Bank announces M1 increase to Dhs 889.3 billion

The Central Bank announced that the money supply aggregate M1 increased by 0.6%, from Dhs884.1 billion at the end of June 2024 to Dhs889.3 billion at the end of July 2024. This was due to Dhs0.2 billion and Dhs5.0 billion rise in currency in circulation outside banks and monetary deposits, respectively.

The money supply aggregate M2 increased by 1.7%, from Dhs2,169.4 billion at the end of June 2024 to Dhs2,205.9 billion at the end of July 2024. M2 increased because of an elevated M1 and Dhs31.3 billion growth in Quasi-Monetary Deposits.

The money supply aggregate M3 also increased by 1.7%, from Dhs2,632.0 billion at the end of June 2024 to Dhs2,676.0 billion at the end of July 2024. M3 expanded due to the growth in M2 and Dhs7.5 billion increase in government deposits.

The monetary base decreased by 1.0%, from Dhs725.0 billion at the end of June 2024 to Dhs718.1 billion at the end of July 2024. The fall in the monetary base was driven by reductions in; currency issued by 0.5% and reserve account by 12.0%, overriding the increases in banks & OFCs’ current accounts & overnight deposits of banks at CBUAE by 26.6% and monetary bills & Islamic certificates of deposit by 0.04%.

Gross banks’ assets, including bankers’ acceptances, increased by 0.9% from Dhs4,310.2 billion at the end of June 2024 to Dhs4,348.6 billion at the end of July 2024.

Gross credit grew by 0.1% from Dhs2,100.9 billion at the end of June 2024 to Dhs2,102.1 billion at the end of July 2024. Gross credit increased due to an increase in domestic credit by 0.3%, superseding the decrease in foreign credit by 1.5%.

Domestic credit expansion was due to increases in credit to the government sector and the private sector by 1.2% and 0.7%, respectively, overriding the decrease in credit to the public sector (government-related entities) by 1.9% and the non-banking financial institutions by 1.2%.

Banks’ deposits increased by 1.6%, from Dhs2,692.5 billion at the end of June 2024 to Dhs2,736.0 billion at the end of July 2024. The growth in total bank deposits was the result of the combined rise in resident deposits by 1.5% and in the non-resident deposits by 2.4%.

Resident deposits grew as a result of increases in; government sector deposits by 0.6%, in government related entities deposits by 10.6% and in private sector deposits by 0.6%. Whereas, non-banking financial institutions deposits fell by 1.0%, at the end of July 2024.

WAM