CBUAE Backs Dh1 Trillion Resilience Plan Amid Strong UAE Financial System.
ABU DHABI: Chaired by His Highness Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Court, and Chairman of the Board of Directors of the Central Bank of the UAE (CBUAE), the Board convened its second meeting of the year today.
The Board highlighted that the UAE’s financial system has remained resilient amid extraordinary global and regional market conditions, with no material impact on the health of the banking sector or the nation’s payment systems.
The meeting was attended by the Vice Chairmen of the Board, H.E. Abdulrahman Saleh Al Saleh and H.E. Jassem Mohamed Bu Ataba Al Zaabi, along with Khaled Mohamed Balama, Governor of the CBUAE.
Also in attendance were Board Members Younis Haji Al Khoori, Sami Dhaen Al Qamzi, and Dr. Ali Mohamed Al Rumaithi, along with Their Excellencies Assistant Governors Ahmed Saeed Al Qamzi and Ibrahim Al Sayed Mohamed Al Hashemi.
Approved: Building on its proactive approach, the Board, under the guidance of the Chairman, approved a comprehensive Financial Institution Resilience Package aimed at strengthening the stability and resilience of the UAE banking sector amid exceptional global and regional challenges.
The CBUAE, which manages record-high foreign exchange reserves exceeding Dh1 trillion ($270 billion) and maintains a monetary base cover ratio of 119%, reaffirmed the strong fundamentals of the UAE’s Dh5.4 trillion banking sector.
The total liquidity held by UAE banks at the CBUAE, combined with their net eligible assets for conventional CBUAE operations, approaches Dh920 billion ($250 billion), with banks’ reserve balances alone exceeding Dh400 billion ($109 billion).
The Financial Institution Resilience Package is structured around five key pillars, enabling banks to access monetary liquidity and offering additional flexibility to utilise excess liquidity and capital buffers in support of the UAE economy:
Pillar I – Monetary Policy Measures: Enhanced access to reserve balances of up to 30% of the cash reserve requirement, along with term liquidity facilities available in both AED and USD.
Pillar II – Liquidity and Funding Relief: Temporary relaxation of liquidity and stable funding ratio requirements, giving banks greater flexibility to support the UAE economy.
Pillar III – Capital Buffer Relief: Temporary release of the Countercyclical Capital Buffer (CCyB) and Capital Conservation Buffer (CCB) to strengthen banks’ capacity to support economic activity.
Pillar IV – Credit Risk Management: Flexibility for banks to defer the classification of individual and corporate loans for customers affected by extraordinary circumstances.
Pillar V – Additional Support: Considering the exceptional conditions and the measures above, the CBUAE emphasizes that banks should continue providing essential financing services to support their customers and the broader national economy.
Financial System Stability
The Board reaffirmed its readiness to deploy all necessary policy tools to safeguard the stability of the UAE’s financial system. It remains committed to maintaining and further enhancing the contribution of the nation’s financial sector to the UAE’s broader vision and to strengthening its competitiveness.
Sheikh Mansour bin Zayed Al Nahyan highlighted the central role of the UAE’s vision in shaping the nation’s economic and financial resilience.
He stated: “The UAE’s enduring financial and economic strength is rooted in the forward-looking vision of the UAE’s leadership. The CBUAE’s precautionary policies and proactive frameworks have consistently proven effective in enhancing the resilience and preparedness of the financial and banking sector, while ensuring monetary and financial stability.”
These accomplishments reflect the continued confidence in our financial system and underscore the global competitiveness of the UAE’s economy.
