DUBAI - The UAE Central Bank is still discussing a plan to provide government guarantees for bonds sold by local lenders.
“It’s an issue that’s being discussed by the board of directors of the central bank,” Governor Sultan bin Nasser Al Suwaidi told reporters in Sharjah on Wednesday.
The banks in the UAE do not face any liquidity problems, but enjoy high liquidity and are not in need of any additional support,
Banks in the UAE faced a shortage of funds after the credit crunch blocked their access to foreign money and as investors speculating on a currency revaluation withdrew cash from the emirate after their expectations were dashed. The gap between commercial-bank loans and deposits in the UAE rose to Dh110 billion, or $30 billion, in March, before declining to Dh24.4 billion in November, central bank data show.
At least three Abu Dhabi-based banks have sold bonds since the outbreak of the credit crisis.
National Bank of Abu Dhabi PJSC, the UAE’s second-biggest bank, sold $850 million of five-year notes in September, while third-ranked Abu Dhabi Commercial Bank PJSC raised $1 billion from five-year paper in October.
First Gulf Bank PJSC, a lender owned by Abu Dhabi’s ruling family, raised $500 million in November.