The gross assets of UAE banks including bankers’ acceptances increased by 0.7 percent from AED4.348 trillion at the end of July 2024 to AED4.378 trillion ($1.19 trillion) at the end of August 2024, according to the latest data from the Central Bank of the UAE (CBUAE).
In its latest monetary and banking developments report for August 2024, the central bank also revealed that gross credit at UAE banks increased by 0.5 percent from AED2.102 trillion at the end of July 2024 to AED2.112 trillion at the end of August 2024. The report attributed this rise to an increase in domestic credit by 0.5 percent and foreign credit by 0.8 percent.
Domestic credit expansion at UAE banks was primarily due to an increase in credit to the private sector by 0.8 percent, overriding the 0.3 percent decline in credit to the public sector and a 3 percent decline to non-banking financial institutions. Credit to the government sector remained constant during August 2024.
Deposits grow to AED2.740 trillion
Meanwhile, deposits at UAE banks increased by 0.2 percent from AED2.736 trillion at the end of July 2024 to AED2.740 trillion at the end of August 2024. The growth in total bank deposits was the result of the rise in resident deposits by 0.8 percent, overshadowing the decrease in non-resident deposits by 6.4 percent.
Resident deposits at UAE banks grew as a result of increases in government sector deposits by 2.6 percent, private sector deposits by 1.2 percent, and non-banking financial institutions deposits by 4.2 percent, making up for the 5.9 percent decrease in government-related entities’ deposits.
Quasi-monetary deposits rise AED6.5 billion
CBUAE also revealed that the money supply aggregate M1 decreased by 0.1 percent, from AED889.3 billion at the end of July 2024 to AED888 billion at the end of August 2024. This decline was mainly due to an AED0.9 billion dip in currency in circulation outside banks and an AED0.4 billion decline in monetary deposits.
However, money supply aggregate M2 rose 0.2 percent from AED2.205 trillion at the end of July 2024 to AED2.211.1 trillion at the end of August 2024. The report attributed the rise in M2 to an AED6.5 billion growth in quasi-monetary deposits, overriding the fall in M1.
In addition, the money supply aggregate M3 increased by 0.8 percent, from AED2.676 trillion at the end of July 2024 to AED2.696 trillion at the end of August 2024. M3 expanded due to the growth in M2 and an AED15.1 billion increase in government deposits.
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Monetary base expands
The monetary base also expanded by 2.3 percent, from AED718.1 billion at the end of July 2024 to AED734.9 billion at the end of August 2024. The growth in the monetary base was driven by increases in the currency issued, reserve accounts, monetary bills and Islamic certificates of deposit. This growth made up for the 10.2 percent decline in banks’ and OFCs’ current accounts and overnight deposits of banks at CBUAE.
