Growth of demand for credit in the United Arab Emirates seems to have stabilised after a slowdown in recent quarters, the UAE central bank said on Thursday.
"Overall, aggregate results are consistent with an ongoing healthy rate of demand growth within the UAE economy and with other partial indicators of economic activity," it said.
Separately, businesses borrowers in the UAE are expected to experience a credit squeeze next year, it was reported on Thursday.
A drop in government deposits is being cited as the main reason that banks will have less liquidity next year.
“One of the main things we expect to see in the GCC, including the UAE, is that liquidity will become tighter,” Marios Maratheftis, chief economist at Standard Chartered bank, told The National yesterday.
“It’s not a credit crunch, it is not a crisis, but we are no longer in an environment where there is ample liquidity. I think it will continue to be tighter next year for everyone,” he added.
Most banks in the region are grappling with margin pressures and liquidity issues as the UAE and other Gulf oil producing states face a squeeze on budgets from lower oil prices, Reuters reported.For all the latest banking and finance news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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