By Tamara Walid
Governor says UAE's economic growth low, or even negative, amid financial crisis.
The UAE's central bank will keep interest rates low to spur growth, Governor Nasser al-Suweidi was quoted as saying on Wednesday, as the economy faces the possibility of contraction in 2009.Suweidi's comments were carried in Arabic language daily al-Bayan. The UAE's overnight repurchase rate stands at 1 percent.
"The prospects for UAE's economic growth will be reduced in 2009 from a high single-digit figure to a low growth rate or maybe even negative, due to the current global financial crisis," the newspaper quoted Suweidi as saying.
The central bank governor said monetary policy will aim to keep official interest rates at low levels in order to revive economic growth.
Suweidi also said he expected banks' profits this year to be lower than last year, due to provisions booked against exposure to Saudi conglomerates Saad Group and Ahmad Hamad al Gosaibi Brother (AHAB).
The newspaper said Suweidi said the UAE economy has emerged "from the bottleneck of the global financial crisis" but there were sectors, primarily property, which require more time to fully recover.
"The downward trend of property prices in the sector will continue, whether it is property sales or rents," he added. (Reuters)
Great news so when can I expect my bank to drop mortgage rates as they have actually increased them this year!
Government should intervene and make sure that this rate cut transfer to the public.
this will only lead to higher profits for the banks, what a joke