Property slowdown 'exaggerated' - UAE bank governor

Al Suwaidi says real estate sector fine and UAE will keep foreign reserves in dollars.
Property slowdown 'exaggerated' - UAE bank governor
By Lamine Ghanmi
Sat 30 May 2009 09:55 AM

The UAE's real estate problems have been exaggerated and the country is not diversifying its foreign currency reserves away from the dollar, according to the governor of the central bank.

Speaking about the Emirate’s property sector Sultan Bin Nasser Al Suwaidi said: "There are reports exaggerating the problems of the sector but we are okay."

"We are not diversifying our foreign currency reserves. We are sticking to the dollar,” Al Suwaidi said on the sidelines of a finance conference in the Moroccan city of Marrakech.

Within the UAE federation, Dubai's economy has been hit hard, with many construction projects held up.

The emirate has outstanding debt of around $80bn.

The central bank bought up $10bn of a $20bn bond scheme issued by the Dubai government in February, the second tranche is due later this year.

"We are not worried about deflation. The United Arab Emirates economy is very competitive," Suweidi said.

The UAE minister of economy said in March inflation in 2009 would be in the range of five to eight percent.

Inflation claimed to record highs in Gulf Arab countries last year but falling oil revenues and the global downturn have helped bring it down.

The UAE, which has the second largest Arab economy, hopes to remain the biggest recipient of foreign direct investment in the Gulf region, accounting for 50 percent of capital inflows last year. (Reuters)

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