UAE currency Dirham liquidity strong

Abu Dhabi - The chief executive said some of the foreign banks are "extremely" aggressive in the top end of the market and that is helped with foreign liquidity coming in.

 Though there is plenty of dirham liquidity in the domestic financial system, however, there is shortage for US Dollar, Alex Thursby chief executive officer of National Bank of Abu Dhabi said.
"There is a dollar shortage," chief executive officer Alex Thursby told reporters on the sidelines of the Global Financial Markets Forum. He said "It's not a crisis, but it is tightening."
The chief executive said some of the foreign banks are "extremely" aggressive in the top end of the market and that is helped with foreign liquidity coming in.
NBAD has a very strong US dollar balance sheet, he said as more than 42 per cent of its liabilities now come from off-shore and those are predominantly not restricted to US dollar, which puts the second biggest lender by assets in a very good position, Thursby said.
He said spot market was working effectively in the country and the Central Bank of the UAE is making sure it does so. Moving forward he said there were some challenges when roll-overs would be due. The chief executive was confident that the system can absorb them but that will mean different pricing and being more conservative and building stock of liquidity well in advance.
To a question on calls being made by some banks for liquidity injection, he said, "We are clear that we have to run a business where we self-help. we won't make calls to ask for help and that mean making measured way of growing balance sheet in line with the liquidity that is available in the market."
Thursby said he would continue to lend small and medium firms and renewable business this year despite the recent situation where almost all the financial institutions lost huge sums to SMEs.
He described the small and medium businesses as an important and profitable segment of NBAD, which would continue to get financial lines this year too. Renewable energy is the new area where NBAD wants to finance Dh1 billion annually in the next ten years. This sector which saw a huge game-changing development two years ago when a company offered lowest power tariff, he said.
- haseeb@khaleejtimes.com