CBUAE, Dubai Finance sign MoU to develop UAE’s capital markets

The Central Bank of the UAE (CBUAE) and Dubai Finance signed a Memorandum of Understanding (MoU) aimed at strengthening bilateral ties and consolidating cooperation across all relevant areas, particularly the development of capital market in the country, leveraging the Central Bank’s advanced financial infrastructure.

The MoU was signed by Khaled Mohamed Balama, Governor of the CBUAE, and Abdulrahman Saleh Al Saleh, Director-General of Dubai Finance Department, in the presence of the assistant governors and senior officials from both entities.

This MoU will enable Dubai Finance Department to utilise the Central Bank’s advanced financial infrastructure to issue dirham denominated government bonds and complementing efforts in developing the capital market in the country.

Both parties will continue to deepen bilateral cooperation in the areas of financial technology, payment systems, the development of a Central Bank digital currency platform, and support for innovative financial services to enhance financial inclusion in the country. Capacity-building will also be promoted through training programs and the exchange of expertise and experiences.

Khaled Mohamed Balama stated, Governor of the CBUAE, said that this MoU represents an important step toward advancing the country’s financial markets, supporting their growth, and ensuring their readiness to adapt to future changes.”

He added, “In light of the rapid transformations in global financial markets, we are working under the vision and guidance of our wise leadership to promote innovation, accelerate the digitisation of financial services and technology, and strengthen effective cooperation and partnerships with federal and local entities.”

“These are key pillars for driving the growth of capital markets and the financial sector, enhancing the investment environment in the country, and contributing to the achievement of comprehensive and sustainable development goals.”

For his part, Abdulrahman Saleh Al Saleh, Director-General of Dubai’s Department of Finance, emphasised the importance of collaboration among financial regulatory bodies in the country to develop the financial services sector and reinforce the UAE’s position as one of the world’s leading financial hubs attractive to investments.

He said, “This MoU marks a pivotal step in strengthening our strategic partnership with the Central Bank to diversify investment tools and develop capital markets in line with the vision of our wise leadership. We are committed to exchanging best practices, developing innovative solutions that keep pace with global developments in financial markets and services, and enhancing national capabilities for a sustainable economic future.”

Meanwhile Gross banks’ assets increased by 1 per cent from Dhs4,973.3 billion at the end of June 2025 to Dhs5,024.1 billion at the end of July 2025.

The Central Bank of the UAE (CBUAE) announced the increase in money supply aggregate M1 by 0.3 per cent, from Dhs1,026.2 billion at the end of June 2025 to Dhs1,029.5 billion at the end of July 2025.

The increase was due to Dhs6.8 billion increase in monetary deposits, overshadowing Dhs3.5 billion decrease in currency in circulation outside banks, according to Monetary & Banking Developments - July 2025, released by the apex bank on Monday. The money supply aggregate M2 grew by 0.6 per cent, from Dhs2,531.2 billion at the end of June 2025 to Dhs2,546.9 billion at the end of July 2025. M2 increased due to an elevated M1, and Dhs12.4 billion increase in Quasi Monetary Deposits.

Consequently, money supply aggregate M3 also increased by 0.8 per cent, from Dhs2,997.6 billion at the end of June 2025 to Dhs3,022.2 billion at the end of July 2025. M3 increased due to the increase in M2, amplified by Dhs8.9 billion increase in government deposits.

The monetary base increased by 0.5 per cent, from Dhs860.0 billion at the end of June 2025 to Dhs864.0 billion at the end of July 2025. The increase in the monetary base was driven by increases in banks & OFCs’ current accounts & overnight deposits of banks at CBUAE by 44.5% and in monetary bills & Islamic certificates of deposit by 12.9%, overriding the decreases in currency issued by 2.6% and in reserve account by 24.9 per cent. Gross credit increased by 1.4 per cent from Dhs2,334.3 billion at the end of June 2025 to Dhs2,366.2 billion at the end of July 2025. Gross credit increased due to the combined growth in domestic credit by Dhs21.0 billion and foreign credit by Dhs10.9 billion.

 The growth in domestic credit was due to increases in credit to the; government sector by 5.2%, public sector (government-related entities) by 1.5%, private sector by 0.5% and non-banking financial institutions by 2.5% Banks’ deposits grew by 1.1%, from Dhs3,045.8 billion at the end of June 2025 to Dhs3,080.3 billion at the end of July 2025.

WAM