GCC member states to strengthen joint cooperation in financial systems

Khaled Mohamed Balama, Governor of the Central Bank of the UAE (CBUAE), attended the 85th Meeting of the GCC Central Bank Governors Committee, which was held in Kuwait.

The meeting was attended by the Governors of the Central Banks of the Gulf Cooperation Council (GCC) member states, along with senior officials from the General Secretariat of the Gulf Cooperation Council.

Ebrahim Obaid Alzaabi, Assistant Governor for Monetary Policy and Financial Stability, also participated in the meeting, accompanied by a delegation of senior CBUAE officials.

During the meeting, the central bank governors reviewed recent monetary and financial developments in the GCC member states and discussed ways to strengthen joint cooperation in the areas of monetary policy, financial systems, and banking services.

The discussions covered a range of topics, including payment systems, supervision, financial technology, the exchange of cybersecurity expertise and information within the banking sector, initiatives to enhance international cooperation, and the Gulf Cooperation Council’s efforts to combat money laundering and the financing of terrorism.

Meanwhile the Central Bank of the UAE (CBUAE) revealed that gross banks’ assets increased by 1.9% from Dhs4,878.3 billion at the end of May 2025 to Dhs4,973.3 billion at the end of June 2025.

CBUAE announced the increase in money supply aggregate M1 by 1.0%, from Dhs1,015.6 billion at the end of May 2025 to Dhs1,026.2 billion at the end of June 2025. The increase was due to Dhs1.7 billion increase in currency in circulation outside banks and Dhs8.9 billion increase in monetary deposits.

According to the CBUAE’s Monetary & Banking Developments for June 2025, the money supply aggregate M2 increased by 2.3%, from Dhs2,474.0 billion at the end of May 2025 to Dhs2,531.2 billion at the end of June 2025. M2 increased due to an elevated M1, and Dhs46.6 billion increase in Quasi Monetary Deposits.

The money supply aggregate M3 also increased by 1.7%, from Dhs2,948.1 billion at the end of May 2025 to Dhs2,997.6 billion at the end of June 2025. M3 mainly increased due to the increase in M2, overriding the Dhs7.7 billion decrease in government deposits.

The monetary base increased by 2.8%, from Dhs 836.7 billion at the end of May 2025 to Dhs860.0 billion at the end of June 2025. The increase in the monetary base was driven by increases in reserve account by 6.8%, and banks & OFCs’ current accounts & overnight deposits of banks at CBUAE by 61.2%, overriding the reductions in currency issued by 0.4% and monetary bills & Islamic certificates of deposit by 14.0%.

Gross credit increased by 1.8% from Dhs2,293.4 billion at the end of May 2025 to Dhs2,334.3 billion at the end of June 2025. Gross credit increased due to the growth in domestic credit by Dhs22.5 billion and foreign credit by Dhs18.4 billion. The growth in domestic credit was due to increases in credit to the private sector by 2.1% and nonbanking financial institutions by 4.6%, while credit to the government sector decreased by 0.4% and credit to the public sector (government-related entities) decreased by 2.3%.

Banks’ deposits increased by 0.9%, from Dhs3,018.5 billion at the end of May 2025 to Dhs3,045.8 billion at the end of June 2025. The increase in bank deposits was driven by the growth in resident deposits by 1.7%, settling at Dhs2,788.6 billion, overshadowing the decrease in non- resident deposits by 7.2%, reaching Dhs257.2 billion.

Within the resident deposits; private sector deposits increased by 1.7%, government-related entities deposits increased by 2.3% and non-banking financial institutions deposits increased by 26.7% by the end of June 2025, while government sector deposits decreased by 1.6%.

Gross banks’ assets, including bankers’ acceptances, increased by 2.7% from Dhs4,749.8 billion at the end of April 2025 to Dhs4,878.3 billion at the end of May 2025.

The Central Bank of the UAE (CBUAE) announced the increase in money supply aggregate M1 by 0.4%, from Dhs1,011.9 billion at the end of April 2025 to Dhs1,015.6 billion at the end of May 2025. The increase was due to Dhs3.4 billion growth in monetary deposits, and Dhs0.3 billion increase in currency in circulation outside banks.

In its Monetary & Banking Developments for May 2025, the CBUAE said that the money supply aggregate M2 increased by 1.6%, from Dhs2,435.6 billion at the end of April 2025 to Dhs2,474.0 billion at the end of May 2025. M2 increased due to an elevated M1, and Dhs34.7 billion increase in Quasi Monetary Deposits.

The money supply aggregate M3 increased by 1.7%, from Dhs2,898.2 billion at the end of April 2025 to Dhs2,948.1 billion at the end of May 2025. M3 increased due to the growth in M2, and Dhs11.5 billion increase in government deposits.

The monetary base increased by 2.2%, from Dhs 819.0 billion at the end of April 2025 to Dhs836.7 billion at the end of May 2025. The increase in the monetary base was driven by increases in: currency issued by 2.1%, reserve account by 29.2%, and in monetary bills & Islamic certificates of deposit by 6.6% overriding the decrease in banks & OFCs’ current accounts & overnight deposits of banks at CBUAE by 48.8%.

Gross credit increased by 1.5% from Dhs2,259.4 billion at the end of April 2025 to Dhs2,293.4 billion at the end of May 2025. Gross credit increased due to the combined growth in domestic credit by Dhs7.1 billion and foreign credit by Dhs26.9 billion.

WAM