The UAE Central Bank (CBUAE) announced an increase in total banking assets inclusive of 3.442 trillion dirhams at the end of last May. This is an increase of 2.9 percent, or the equivalent of 97.9 billion dirhams month on month, compared to about 3.344 trillion dirhams in April 2022.
According to the CBUAE’s report on monetary and banking developments for May 2022, banking assets grew by 8.2 percent year on year, or the equivalent of 260.7 billion dirhams, compared to about 3.182 trillion dirhams in May 2021.
Total bank credit expanded by 2.65 percent, or 48.1 billion dirhams, to 1.865 trillion dirhams at the end of May, up from 1.817 trillion dirhams in April. This is due to a 3 percent increase in domestic credit versus a 0.1 percent decrease in foreign credit.
The upsurge in domestic credit was attributed to an increase of 1.4 percent in credit granted to the government sector, 1.3 percent in credit extended to the public sector (government-related entities), 3.5 percent in credit provided to the private sector, and 16.9 percent in credit granted to non-bank financing institutions, according to CBUAE.
Total bank deposits rose by 1.6 percent month on month, from 2.008 trillion dirhams at the end of April to 2.040 trillion dirhams at the end of May 2022, owing to a 2 percent increase in resident deposits and a 1.2 percent drop in non-resident deposits.
The CBUAE attributed the rise in residents’ deposits to increases in government sector deposits, public sector deposits, and private sector deposits of 10.6 percent, 6.1 percent, and 0.02 percent, respectively. Meanwhile, non-bank financial institution deposits decreased by 18 percent.
Moreover, the report revealed that the money supply M1 – which includes cash in circulation outside banks plus cash deposits or the current and demand accounts with banks – fell by 2.8 percent from 730.4 billion dirhams at the end of April to 710.1 billion dirhams at the end of May 2022. This is due to a 4.6 billion dirham drop in cash in circulation outside banks and a 15.7 billion dirham drop in cash deposits.
The money supply M2 – which includes M1 + semi-monetary deposits or the time and savings deposits for residents in dirhams and deposits of residents in foreign currencies – increased by 0.1 percent from 1.567 trillion dirhams at the end of April 2022 to 1.568 trillion dirhams at the end of May last year, despite an M1 decrease.
The money supply M3 – which includes M2 + government deposits with banks operating in the country as well as with the Central Bank – increased by 1.7 percent from 1.858 trillion dirhams at the end of last April to 1.89 trillion dirhams at the end of May 2022. This is due to an increase in the money supply M2 and a 30.8 billion dirham growth in government deposits.
