The UAE Central bank announced special 50b dirham ($13.6b) liquidity facility to provide capital to banks which are exposed to the withdrawal of foreign capital and freezing of global credit markets. The new funding facility will be available to banks operating in the country. The central bank has reviewed additional resources to provide support as needed.
There is huge demand for funds in the UAE market and there has been a massive shortfall in the availability of funds in the context of credit squeeze in the international markets. The fund infusion will certainly help ease the shorfall," said Jason Goff," Head of Treasury sales at Emirates NBD.
Marios Maratheftis Regional Head of Research, Standard Chartered Bank, said: "UAE authorities have the financial strength to add liquidity when needed, and this move suggests that the central bank is seeing the need to provide the market with added liquidity now. Even with liquidity drying up and interbank rates rising, in real terms, interest rates are still significantly negative."
Analysts view this move as similar to those made by major central banks including the Federal Reserve and European Central Bank, which resulted in markets responding positively.
What makes even the UAE vulnerable?
;)
;)
While this doesn't surprise me, it does show the ripple affect of our entire economy. I can't believe that the world is now so intertwined. I have spoken to people in the past 2 weeks who interface with the world bank and they are desperately trying to get funds to the united states to stimulate the economy. The comments were that we can't have China becoming the next world power. Just amazing.