Final decision on new Eibor system this year: Al Mansoori

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Final decision on new Eibor system this year: Al Mansoori
Mubarak Rashid Al Mansoori

Published: Tue 27 Feb 2018, 6:00 PM

Last updated: Tue 27 Feb 2018, 9:36 PM

A final decision on a new system of setting Emirates Interbank Offered Rates (Eibor), which will be more efficient and more closely based on real data from the market, is expected to be taken this year, the UAE central bank governor said on Tuesday.
"It's ongoing and we're having final discussions with the banks," Mubarak Rashid Al Mansoori told Reuters on the sidelines of a financial industry conference in Abu Dhabi.
On when the new system would be introduced, he added: "I'm hopeful anytime soon, but it depends on our talks with the banks."
A decision still needs to be taken on whether the number of banks on the rate-setting panel will change, Mansoori said.
Eibor rates, used in many UAE financial transactions, are calculated daily by a panel of 10 banks for maturities ranging from overnight to one year. Under the present system, the two highest and two lowest rates quoted by banks are discarded and the rest are averaged.
The central bank has been considering ways to make the system more accurate in representing market conditions, and more transparent. The changes were expected to be introduced last month but the announcement was delayed, apparently because the new system needed more work, local bankers said. 
Fintech is good
The technology underlying cryptocurrencies and other new financial technologies are really beneficial to the banking sector, Mansoori said.
Asked at a financial industry conference whether US interest rate rises this year might pressure the UAE dirham's peg to the US dollar, Mansoori reiterated that the fixed exchange rate regime had benefited his country. 
 

By Reuters

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