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Rohit's side begin a busy schedule with the opening match against Bangladesh starting on Thursday
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Central Bank Wants to See Lower Lending Rates
ABU DHABI - The Central Bank of the UAE will take up with banks the issue of rising lending rates that have gone up to six-month high in recent weeks.
A central bank official expressed his concern that the interbank offered rates do not reflect the true market lending rates.
The Emirates Interbank Offered Rates, or EIBOR, have been rising during past several weeks as the cash-hungry banks competing for deposits have pushed them upwards.
It (EIBOR) does not reflect true market rates, so this is going to be discussed thoroughly at our next meeting with commercial banks,” Saif Hadef Al Shamsi, senior executive director for treasury department at the Central Bank of the UAE, told reporters on the sidelines of the ‘Regulators and Financial Markets Summit: Working Mechanisms, Limitations and Prerogatives’, in Abu Dhabi on Monday.
“There are some demands from banks and the central bank will come up with some proposals at the next meeting on how to bring the rates down,” he said. Al Shamsi said the meeting would take place soon but did not give any details.
The benchmark UAE 3-month rate was fixed at 2.17 per cent on Monday, up from 1.89 percent a month ago, with rates ranging from as low as 1.20 per cent to 2.50 per cent.
In September, the UAE central bank changed the panel of providers for the EIBOR and altered the formula used to calculate it, aiming to bring rates down and boost lending in the UAE.
Rashid Al Baloushi, deputy chief executive officer of Abu Dhabi Securities Exchange, said that cutting lending rates by one per centage point in short-term could mean additional liquidity will come into the market, encouraging banks to lend. “It would help assist in boosting the economy also,” he said.
A banker said that the non-performing loans (NPLs) are rising and are expected to go up to 6.5 per cent this year, up from 4.4 per cent last year.
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