UAE doubles stimulus package to US$70 billion

ABU DHABI: The Central Bank of the United Arab Emirates said today it has doubled to US$70 billion (RM305 billion) a stimulus package to support the Gulf state’s economy amid the coronavirus pandemic.

“The aggregate value of all capital and liquidity measures adopted by the CBUAE since 14 March 2020 has reached 256 billion dirhams (US$70 billion),” the central bank said in a statement.

Last month, oil-rich UAE announced stimulus worth US$35 billion that included aid to the banking system, facilities for loans and injecting funds into the bourses.

Most of the new measures focused on easing financial and liquidity requirements for banks to free up cash for lending.

In the new measures, the central bank reduced by half to 7.0% the reserves banks are required to keep for demand deposits, which can be withdrawn by clients anytime. This will allow for some US$16.6 billion in liquidity to be used in new bank lending, the central bank said.

The regulator’s new measures also allow banks to defer payment of loans for companies and clients until the end of 2020.

“The additional measures announced today will effectively relieve the pressure on financial institutions … offering the required relief and continued access to funding for businesses and households,” newly appointed governor Abdulhamid Saeed said.

The UAE, where 1,505 coronavirus cases and 10 deaths have been reported, has introduced strict measures including halting travel and closing shopping malls and entertainment venues.

On Saturday night, Dubai, one of the seven emirates making up the UAE, announced a two-week lockdown in which it will carry out tests in densely populated areas.

Separately, UAE Vice President Sheikh Mohammed bin Rashid al-Maktoum said today the UAE will reinforce its stockpile of strategic goods and will waive residency visa fines for the rest of the year in response to the coronavirus outbreak.

Sheikh Mohammed, who is also the UAE prime minister and ruler of Dubai, the region’s tourism and business hub, did not say what goods were included in the stockpile or give further details on the visa fine waiver.

Tweeting after a Cabinet meeting, he also said authorities had directed factories to support the health sector’s needs in the country. – AFP, Reuters

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