The UAE central bank has said that it was closely watching events stemming from the Dubai debt crisis to ensure no harm results for the national economy, a spokesman for the central bank said on Saturday.
"The central bank is monitoring developments very carefully to ensure that there is no negative impact on the UAE economy," the spokesman told Reuters by phone.
Constitutionally, each emirate in the UAE is a separate legal entity within the loose federation, and each controls its own natural and financial resources. The federal government has no guaranteed access to those resources nor is it obliged to underwrite the liabilities of any emirate.
International markets were rocked when Dubai said on Wednesday it was instigating a major restructuring at one of its biggest holding companies, Dubai World.
As part of the restructuring program, investors have been advised of a "standstill" in repayment of flagship real estate developer Nakheel's $3.5 billion Islamic bond, or sukuk, due for maturity on December 14.
Dubai World had $59 billion of liabilities as of August, making up the majority of Dubai's total debt of $80 billion. International banks' exposure related to Dubai World could reach $12 billion in syndicated and bilateral loans, banking sources told Thomson Reuters.
A statement from the Dubai government is expected on Monday, when the markets reopen following an extended break for Eid, a religious holiday observed across the Gulf region. (Reuters)For all the latest business 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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