Chaired by Sheikh Mansour bin Zayed Al Nahyan, the Board of the Central Bank of the United Arab Emirates (CBUAE) held its second meeting of the year, reaffirming the resilience of the UAE’s financial system amid ongoing global and regional developments.
The Board noted that the country’s banking sector and payment systems continue to operate without any material impact, highlighting the strength of financial fundamentals despite current market conditions.
Strong Banking Sector Fundamentals
The CBUAE confirmed that the UAE’s banking sector remains robust, supported by foreign exchange reserves exceeding AED 1 trillion and a monetary base cover ratio of 119%.
Total liquidity held by banks at the central bank, combined with eligible assets, reached nearly AED 920 billion, including more than AED 400 billion in reserve balances.
The financial system, valued at approximately AED 5.4 trillion, continues to demonstrate stability and strong capitalisation.
Five-Pillar Financial Institution Resilience Package
The Board approved a comprehensive Financial Institution Resilience Package aimed at reinforcing stability and ensuring continued support for the national economy. The package is structured around five key pillars:
- Monetary Policy Measures: Enhanced access to reserve balances of up to 30% of cash reserve requirements, alongside term liquidity facilities in AED and USD.
- Liquidity and Funding Relief: Temporary easing of liquidity and stable funding ratios to provide banks with additional flexibility.
- Capital Buffer Relief: Temporary release of the Countercyclical Capital Buffer (CCyB) and Capital Conservation Buffer (CCB).
- Credit Risk Management: Flexibility for banks to delay classification of loans for affected individual and corporate customers.
- Additional Support: Continued provision of financing services to support customers and the broader economy.
Commitment to Financial Stability
The Board reiterated its readiness to deploy additional policy tools if required to safeguard financial stability and maintain confidence in the system.
Sheikh Mansour bin Zayed Al Nahyan emphasised that the UAE’s financial strength is rooted in the leadership’s long-term vision, noting that proactive policies and regulatory frameworks have played a key role in ensuring resilience and competitiveness.
He stated that these measures continue to reinforce confidence in the financial system and support the United Arab Emirates’s position as a globally competitive economic hub.
