UAE credit growing at 'reasonable rate' - Cbank governor

Money circulating in the UAE had more than doubled in the last two years.
UAE credit growing at 'reasonable rate' - Cbank governor
CREDIT GROWING: UAE cbank governor said that credit is growing at a reasonable rate in the UAE. (Getty Images)
By Martin Dokoupil and Tamara Walid
Mon 24 May 2010 08:28 PM

Credit is growing at a reasonable rate in the UAE, and banks have a positive view of Dubai World's debt proposal, UAE central bank governor Sultan bin Nasser al Suweidi said on Monday.

Speaking to reporters on the sidelines of a financial conference in Dubai, Suweidi said: "Banks are finding Dubai World proposal very much agreeable."

Dubai World reached a deal to restructure $23.5 billion in debt with its core lenders last week, addressing the most immediate of a string of problems facing investors in the Gulf emirate, which part of the UAE.

Turning to credit growth, Suweidi said: "Our opinion is that, under the circumstances, it (credit) is growing at a reasonable rate."

Money supply in the UAE grew 2.1 percent year on year at the end of April, down from a 3.3 percent rise in the previous month, central bank data showed last week.

M3, the broadest measure of money circulating in the economy and an indicator of future inflation, grew only 1.4 percent in February in the slowest pace since at least 2001 as banks grappled with Dubai's debt restructuring.

It rose to 941.2 billion dirhams ($256.2 billion) at the end of April, from $254.5 billion at the end of March, the data showed.

Money circulating in the second largest Arab economy and the world's third largest oil producer had more than doubled in the two years to the end of 2008. (Reuters)

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