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Discuss this article (5 Comments)UAE will not cut interest rates 'immediately'
by This email address is being protected from spam bots, you need Javascript enabled to view it on Wednesday, 25 March 2009
INTEREST CUTS: No immediate action will be taken to cut interest rates in the UAE despite possibility of economic contraction.
All Gulf Arab economies face a possible economic contraction this year but the UAE will definitely not cut interest rates immediately, the Emirate's central bank governor said on Wednesday.
Sultan Nasser Al Suweidi told reporters that the UAE was looking at how to bridge loan-to-deposit ratios.
He said that banks' capital adequacy ratios would be raised to 11 percent by June 30.
"A contraction is a possibility in all GCC countries," he said.
"It is still on the drawing board with the UAE finance ministry to help bridge a gap between loans and deposit ratios," he added. (Reuters)
READERS' COMMENTS
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Increasing bank rates
Posted by Frank, Dubai, UAE on Thursday 26 March 2009 at 16:24 UAE time
If any potential or existing mortage-holder is looking for a home loan, scratch off HSBC as a potential lender! I've been a loyal HSBC customer for 18 years in the Gulf, got a mortgage for a family home, only to see my mortgage rate jump 1.35% in the past 3 months and my available credit on my only HSBC credit card get slashed by 40% in their attempt "to be prudent with credit" as their customer service person put it. Save time in your credit search, avoid using HSBC ... from a Dis-satisfied HSBC customer!
Posted by Frank, Dubai, UAE on Thursday 26 March 2009 at 16:24 UAE time
If any potential or existing mortage-holder is looking for a home loan, scratch off HSBC as a potential lender! I've been a loyal HSBC customer for 18 years in the Gulf, got a mortgage for a family home, only to see my mortgage rate jump 1.35% in the past 3 months and my available credit on my only HSBC credit card get slashed by 40% in their attempt "to be prudent with credit" as their customer service person put it. Save time in your credit search, avoid using HSBC ... from a Dis-satisfied HSBC customer!
Warped economics
Posted by Mr G, Dubai on Thursday 26 March 2009 at 11:01 UAE time
As a property owner in Dubai I'd also like to make the point that the extra money I am now paying on my mortgage on a monthly basis is money that I am no longer spending in the economy. It's warped economics! It's also symptomatic of the fact that those running the Central Bank are also those who don't really appreciate the concept of personal borrowing - unlike 99% of the population, they're the lucky few whose personal wealth means they pay cash for their houses, cars, etc.
Posted by Mr G, Dubai on Thursday 26 March 2009 at 11:01 UAE time
As a property owner in Dubai I'd also like to make the point that the extra money I am now paying on my mortgage on a monthly basis is money that I am no longer spending in the economy. It's warped economics! It's also symptomatic of the fact that those running the Central Bank are also those who don't really appreciate the concept of personal borrowing - unlike 99% of the population, they're the lucky few whose personal wealth means they pay cash for their houses, cars, etc.
Interest rates
Posted by S wakeham, Dubai, UAE on Thursday 26 March 2009 at 10:48 UAE time
It seems to me that banks here in the UAE are using interest rates to make money out of existing customers whilst frightening off any new potential ones. In other words those of us who make our repayments on time are subsidizing those who don't and any new customers that might represent a "risk" are simply not being entertained. I applied 3 months ago with 2 banks to re-finance my house here in Dubai, to a maximum of only 25% of it's value by today's rates and have so far drawn a blank. If anyone knows of a bank that actually wants to do business please let me know!
Posted by S wakeham, Dubai, UAE on Thursday 26 March 2009 at 10:48 UAE time
It seems to me that banks here in the UAE are using interest rates to make money out of existing customers whilst frightening off any new potential ones. In other words those of us who make our repayments on time are subsidizing those who don't and any new customers that might represent a "risk" are simply not being entertained. I applied 3 months ago with 2 banks to re-finance my house here in Dubai, to a maximum of only 25% of it's value by today's rates and have so far drawn a blank. If anyone knows of a bank that actually wants to do business please let me know!
No immediate drop in Interest
Posted by ismail, dubai, uae on Thursday 26 March 2009 at 08:30 UAE time
I agree with above comment, All world is reducing their interest rate to ease the property market as well as for new buyer. UAE is doing on other direction which don't make any sense for me at least.
UK, US, Australia, France, Germany, Japan and rest has drop rate in some case almost to ZERO. Unless you accept their is propbelm you can't resolve. We all have to accept their is a problem and lets work together to solve.
Posted by ismail, dubai, uae on Thursday 26 March 2009 at 08:30 UAE time
I agree with above comment, All world is reducing their interest rate to ease the property market as well as for new buyer. UAE is doing on other direction which don't make any sense for me at least.
UK, US, Australia, France, Germany, Japan and rest has drop rate in some case almost to ZERO. Unless you accept their is propbelm you can't resolve. We all have to accept their is a problem and lets work together to solve.
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