UAE finance chief reveals plan to cut interest rates

zoom

RATES PLAN: The UAE Central Bank is set to announce interest rate cuts in a bid to stimulate the economy.

A plan to cut interest rates is to be introduced by the UAE Central Bank in a move to ease liquidity problems, Central Bank governor Sultan Nasser Al Suwaidi has revealed.

"We have almost finished the plan and will announce the details soon. It will help to stimulate the UAE's economy," added Al Suwaidi in comments published by Emirates Business on Wednesday.

He declined to give further information or say how far rates would fall, but added: "The rate will not be zero as is the case in the US. We aim to introduce a low interest rate and maintain it."

The governor also said that UAE inflation was expected to remain at its current estimated level of 5 percent in 2009 in quotes published by state news agency WAM.

Last week, the UAE minister of economy said inflation in 2009 would be in the range of 5 to 8 percent in the second largest Arab economy.

Standard Chartered's regional head of research said last week that inflation in the UAE could drop to around 2 percent in 2009 after peaking at an estimated 13-14 percent last year.

Suweidi said the UAE should set "realistic" growth targets as liquidity improves in its banking system thanks to better economic activity, WAM said.

"His Excellency ... reiterated that there was an improvement in liquidity conditions at UAE banks which is accompanied with (increased) economic activity in various fields," WAM added.

"In relation to necessary precautionary steps in this stage, he stressed the importance of determining the targeted economic growth figure in the country which he said should be realistic ...," WAM noted.

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Interest Rates/Property prices
Posted by Potential Dubai Resident, London, United Kingdom on Thursday 19 March 2009 at 12:20 UAE time


Banks in the UK has a very inconsistent policy on interest rates. I have a tracker mortgage at 0.49% over base rate with the Wooolwich (part of Barclays) so tht has gone down to .99% interest, saving me about £500 per month on what I was paying a year ago.

However, my small business overdraft facility with Barclays has been increased to 12% on top of the 1% annual arrangement fee. This seems to be fairly common practice with small businesses getting similar increases in the past 12 months.

Interest rates for savers here are generally less than 3% with building societies and as low as 0%, with my private investment bank, unless I have over £100,000 cash, then they will give me 0.4% interest!!!!

I am about to sell my 8 year old 5 bedroom house house in the UK, after dropping the price by just over 25% in 22 months. We had just four offers in that period - three from non-British buyers.

There is a new buzz word for property investors here - 'vulture capitalists'!

I think Dubai property owners face even bigger drops than 25% over this year. I would not buy property there, unless prices fall back to at least 2004 levels.

Interest rate cut
Posted by Mosa, Toronto, Canada on Thursday 19 March 2009 at 08:36 UAE time

My mortgage payment with NBD increases from this month. It is EIBOR plus 3.5%. So is it that EIBOR increased?! This is a time world over interest rates are coming down and my bank increasing it?!
This is the problem in this country, there is no regulations. Still they compare everything against the world when it is convenient.
I cannot sell my property because no buyer. Bank is not ready to cancel the mortgage. I have no income. I cannot get out of this country because of the mortgage and other obligations!
Disappointed to the core!

mortgage rates have to come down....
Posted by kate, dubai, uae on Wednesday 18 March 2009 at 18:55 UAE time


To echo Hassan, this article means nothing unless the government ensures that the banks pass this on to the customer.

It seems that whilst the rest of the world has come to terms with the fact that we are in a deep global recession, the greedy banks in the UAE appear to have missed that we have been worse hit and perversly INCREASED their mortgage rates - thanks HSBC!

As a result of the above factors I am set to lose four years worth of savings which I stupidly invested into the property market here whilst we were all revelling in the 'boom'.

Come on Dubai, help us to help this city get back on its feet and do what every other industrialised country is doing and lower your lending rates.

Barclays increasing monthly mortgage payments!!!!!
Posted by Nazareth Tankarian, Dubai, UAE on Wednesday 18 March 2009 at 16:07 UAE time


Interest rates are dropping across the globe, close to 0 in the states.
Barclays in the U.A.E has cut down new loans and is forcing existing loan holders to pay more per month. In my case, Barclays is making me pay 20% more per month at a time when my Job is in doubt and my salary is under consideration to be reduced.

View all comments (8) >>

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM