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)For all the latest UAE 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.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.