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, the Board held its second meeting of the year, during which the resilience of the UAE's financial system and its high capacity to withstand current extraordinary circumstances were reviewed.
According to Bahrain News Agency, the Board approved a comprehensive proactive support package to enhance the resilience of financial institutions and support the stability of the banking sector. The Central Bank of the UAE oversees record-high foreign exchange reserves exceeding AED 1 trillion (USD 270 billion), with a monetary base cover ratio of 119%, reflecting the strong fundamentals of the AED 5.4 trillion banking sector.
The approved package includes five main pillars aimed at providing monetary liquidity and additional flexibility to banks. These measures include enhanced access to reserve balances up to 30%, the provision of liquidity facilities in AED and USD, temporary reductions in liquidity and capital buffer requirements, and flexibility in credit risk management. This includes the postponement of loan classifications to provide relief for those affected by the current circumstances.
HH Sheikh Mansour bin Zayed affirmed during the meeting that the forward-looking vision of the wise leadership is the principal guarantee for the stability of the financial system. He noted that the precautionary policies and proactive regulatory frameworks have proven effective in strengthening the preparedness of the banking sector and maintaining monetary stability, thereby consolidating the position of the United Arab Emirates as a leading global financial centre.