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Wed 3 Aug 2016 10:46 AM

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UAE set to approve federal debt law

New rules would allow bonds sale at a federal level

UAE set to approve federal debt law
Younis Al Khouri (right), the undersecretary at the Ministry of Finance. Image: MoF.

A federal debt law will reportedly be approved in the coming months, allowing the government to sell bonds at a federal level.

The UAE Finance Ministry has worked on the issue for many years, reported The National. Currently, individual emirates, mainly Abu Dhabi and Dubai, have tapped the international bond markets.

"We have one clause outstanding, which is the debt ceiling and the servicing of the debt," said Younis Al Khouri, the undersecretary at the Ministry of Finance. "Once we agree with the central bank then we will go to the council of ministers for approval and after that is the FNC [Federal National Council] approval.

It could see up to $27.2 billion (AED100bn) raised through via a bond sale, said Mr Al Khouri in February, according to the report.

UAE debt issuance is expected to accelerate as the country seeks to finance a fiscal deficit, which reached 2.1 per cent of GDP in 2015, according to IMF estimates.

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