Foreign assets decline to $81bn compared to previous month as falling oil prices continue to impact economy
The UAE central bank’s foreign assets fell by $12 billion in January from the previous month as the economy continued to be impacted by falling oil prices, it has been reported.
Foreign assets declined to AED296.9 billion ($81 billion) from AED341.1 billion, according to data posted on the central bank’s website, Bloomberg reported.
It said cash, bank balances and deposits with banks abroad dropped almost 30 percent to AED122.2 billion, while investments in held-to-maturity foreign securities and other foreign assets increased.
The drop in oil prices has also boosted speculation that countries in the region will be pushed to adjust their currencies’ fixed exchange rates to the dollar.
Twelve-month forward contracts for the UAE dirham, used partly to bet on a devaluation of the currency, climbed to 325 points last month, their highest since 2009, Bloomberg added.
The UAE holds about 6 percent of global crude reserves.
Earlier this month, Fitch said the Abu Dhabi Investment Authority (ADIA), one of the world’s largest sovereign wealth funds, is expected to see its assets decline by just over 5 percent this year.
The ratings agency said it projected a fall from an estimated $502 billion by end-2014 to $475 billion as outflows outpace investment returns.