The Central Bank of the UAE (CBUAE) reported an increase in the money supply for May 2025, with M1 rising by 0.4% to AED 1,015.6 billion. This growth was driven by a AED 3.4 billion rise in monetary deposits and a AED 0.3 billion increase in currency circulation outside banks.
The M2 money supply saw a 1.6% increase, growing from AED 2,435.6 billion in April 2025 to AED 2,474.0 billion by the end of May. This was primarily due to the growth in M1 and an AED 34.7 billion increase in Quasi Monetary Deposits. Similarly, M3 grew by 1.7%, reaching AED 2,948.1 billion, driven by M2 growth and a AED 11.5 billion rise in government deposits.
Monetary Base and Bank Assets Soar
The monetary base increased by 2.2%, moving from AED 819.0 billion to AED 836.7 billion, supported by a 2.1% rise in currency issued, a 29.2% rise in reserve accounts, and a 6.6% increase in monetary bills and Islamic certificates of deposit. Gross banks’ assets, including bankers’ acceptances, also saw growth, rising 2.7% to AED 4,878.3 billion.
Credit and Deposits Show Continued Growth
Gross credit increased by 1.5%, reaching AED 2,293.4 billion. This was due to both domestic and foreign credit growth, with domestic credit rising by AED 7.1 billion and foreign credit by AED 26.9 billion. Domestic credit growth was driven by a 2.0% increase in government sector credit and a 0.8% rise in private sector credit.
Banks’ total deposits increased by 1.8%, settling at AED 3,018.5 billion. The increase was driven by a 1.9% rise in resident deposits, which reached AED 2,741.3 billion, and a 0.6% rise in non-resident deposits, reaching AED 277.2 billion. Resident government sector deposits rose by 3.4%, while private sector deposits grew by 1.9%. However, non-banking financial institutions saw a 6.1% decrease in deposits.
