The Central Bank of the UAE (CBUAE) announced that the total assets of banks, including bankers’ acceptances, saw an increase of 0.5 percent, rising from AED4,378.0 billion (AED4.4 trillion or roughly $1.2 trillion) at the end of August 2024 to AED4,401.7 billion at the conclusion of September 2024.
Growth in gross credit
According to its Monetary & Banking Developments Report for September 2024, the central bank indicated that total gross credit rose by 2.3 percent, moving from AED2,112.9 billion ($2.1 trillion or approximately $588 billion) at the end of August 2024 to AED2,161.9 billion at the end of September 2024. This growth in gross credit was attributed to a 1.6 percent rise in domestic credit and a 6.9 percent increase in foreign credit. The expansion in domestic credit was driven by increases in credit to the government sector by 0.4 percent, credit to the public sector (government-related entities) by 2.7 percent, credit to the private sector by 1.5 percent, and credit to non-banking financial institutions by 1.8 percent.
Rise in bank deposits
Moreover, bank deposits experienced an increase of 0.8 percent, climbing from AED2,740.5 billion (AED2.74 trillion or $746 billion) at the end of August 2024 to AED2,761.4 billion ($751.4 billion) by the end of September 2024. This growth in overall bank deposits was fueled by a 0.8 percent rise in resident deposits and a 0.5 percent increase in non-resident deposits.
Breakdown of resident deposits
The rise in resident deposits was largely due to a 4.9 percent increase in deposits from government-related entities, a 0.8 percent uptick in private sector deposits, and a significant 20.5 percent increase in deposits from non-banking financial institutions, which offset a 3.9 percent decline in government sector deposits.
Read more: CBUAE reports banks extend $22.1 billion in financial support to SMEs by mid-2024
Increase in money supply aggregate M1
Additionally, the bank reported that the money supply aggregate M1 increased by 0.9 percent, from AED888.0 billion at the end of August 2024 to AED896.3 billion at the end of September 2024. This rise was primarily a result of a AED2.0 billion increase in currency in circulation outside of banks, along with a AED6.3 billion growth in monetary deposits.
Growth in money supply aggregate M2
The money supply aggregate M2 also saw a 1.7 percent increase, rising from AED2,211.1 billion at the end of August 2024 to AED2,249.6 billion at the end of September 2024. This growth in M2 was driven by the elevated M1 and a AED30.0 billion increase in Quasi-Monetary Deposits.
Expansion of money supply aggregate M3
Furthermore, the money supply aggregate M3 experienced a 0.9 percent rise, moving from AED2,696.3 billion at the end of August 2024 to AED2,719.8 billion at the end of September 2024. The expansion of M3 was largely due to the increase in M2, which outweighed a AED15.0 billion decline in government deposits.
Surge in the monetary base
Lastly, the monetary base grew by 1.2 percent, from AED734.9 billion at the end of August 2024 to AED743.5 billion at the end of September 2024. This increase in the monetary base was propelled by a 1.0 percent rise in currency issued and a remarkable 39.2 percent increase in the current accounts and overnight deposits of banks at CBUAE, despite a 14.1 percent reduction in reserve accounts. Meanwhile, monetary bills and Islamic certificates of deposit remained unchanged at AED240.9 billion.
