The UAE Central Bank is providing support to the banking sector amid the coronavirus crisis. Sammy Dallal / The National
The UAE Central Bank is providing support to the banking sector amid the coronavirus crisis. Sammy Dallal / The National
The UAE Central Bank is providing support to the banking sector amid the coronavirus crisis. Sammy Dallal / The National
The UAE Central Bank is providing support to the banking sector amid the coronavirus crisis. Sammy Dallal / The National

UAE Central Bank rolls out Dh100bn stimulus package


Massoud A Derhally
  • English
  • Arabic

The Central Bank of the UAE rolled out a comprehensive Dh100 billion economic stimulus package on Saturday to offset the impact of the coronavirus pandemic.

“Given that the World Health Organisation has declared Covid-19 virus as a global pandemic, the Central Bank of the UAE has adopted a number of measures in an effort to support the economy and protect consumers,” the regulator said.

"We will continue monitoring the situation very closely, and are prepared to take further steps, if necessary," it said.

The Targeted Economic Support Scheme includes Dh50bn from Central Bank funds through collateralised loans at zero cost to all banks operating in the UAE and Dh50bn funds freed up from banks’ capital buffers.

“The UAE banking system is adequately capitalised and banks maintain significant voluntary capital buffers in addition to the minimum prudential requirements,” the Central Bank said. “The draw-down of those voluntary buffers is not considered for the purposes of calculating the overall size of the Targeted Economic Support Scheme.”

The Central Bank said it "confirms continued and strong commitment" to maintain the peg of the UAE dirham to the US dollar. Foreign currency reserves stand at more than Dh405bn as of March 10 and are "are adequate to safeguard the stability of the national currency and achieve the CBUAE's objective to ensure monetary and financial stability in the state".

The regulator's latest measures come as the coronavirus outbreak intensifies outside China, the county of its origin. The virus has now evolved rapidly in Europe and the US, with more than 155,000 infections globally and more than 5,500 deaths. Though more than 75,000 patients have recovered.

The coronavirus, the biggest challenge to the global economy since the 2008 financial crisis, has disrupted trade, the travel industry and wiped nearly $17 trillion from stock markets worldwide. On March 12, financial markets across the world endured their worst day since black Monday in 1987 as fears about the effect of the pandemic continues to shake investor confidence.

Governments in many countries have unveiled stimulus packages aimed at protecting citizens from the impact of virus. The US Federal Reserve and several other central banks have cut interest rates to ensure there is ample liquidity, that credit markets do not stall and economies do not slide into a recession.

The International Monetary Fund and the World Bank have committed to extend $62bn in financial assistance and policy advice to countries in need.

The stimulus package by the Central Bank of the UAE aims to "facilitate provision of temporary relief from the payments of principal and interest on outstanding loans for all affected private sector companies and retail customers in the UAE".

The regulator ordered banks to use the funding "to grant temporary relief" to private sector corporate customers and retail clients for a period of up to six months, as "many retail and corporate customers have become exposed to the risk of temporary shortfall of their cash flows due the outbreak of Covid-19 pandemic, and the scheme is addressing the current situation by providing both a relief to customers and a zero cost funding to banks".

All banks will be allowed to tap into a maximum of 60 per cent of the capital conservation buffer, and additionally, banks "designated as systemically important" by the Central Bank will be able to use 100 per cent of their additional capital buffer for systemic importance.

The regulator is reducing the amount of capital banks have to hold for their loans to small and medium sized businesses by 15 to 25 per cent. This will increase available financing to SMEs.

The Central Bank will raise the loan-to-value ratios applicable to mortgage loans for first-time homebuyers by 5 percentage points.

"This will contribute to the affordability of housing without unduly increasing inherent risks," it said. First time buyers will benefit from being required to put up less of their own capital for their first real estate purchase.

The Central Bank is also revising the existing limit which sets maximum exposure that banks can have to the real estate sector. When the exposure reaches 20 per cent of the banks’ loan portfolio, banks will be allowed to increase it to 30 per cent, however they will be required to hold more capital.

Fees incurred by merchants associated with use of debit or credit cards by customers will be reduced. New Central Bank regulations will limit fees that banks can charge to their SME customers and restrict lenders from requiring larger minimum account balance than Dh10,000.

Under the news regulations lenders will be required to open accounts for SME customers within two days, contingent on the necessary documentation and that "the risk is acceptable in view of the anti-money laundering and combating the financing of terrorism obligations".

The Central Bank will issue guidelines on margin calls, that require lenders to request additional collateral within a reasonable time, before liquidating pledged stocks in a situation of a market downfall.

"This would reduce excessive market volatility and provide investors with increased flexibility to act in their best interest," it said.

For a period of six months starting March 15, the regulator is waiving all fees which it charges for the payment services provided to banks operating in the UAE through its payment and settlement systems.

On Thursday, Sheikh Hamdan bin Mohammed, Crown Prince of Dubai, also unveiled an economic stimulus package worth Dh1.5bn aimed at reducing the effects of the coronavirus and protecting businesses, with a focus on tourism, retail, external trade and logistics services.

Russia's Muslim Heartlands

Dominic Rubin, Oxford

 

 

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While you're here
Key facilities
  • Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
  • Premier League-standard football pitch
  • 400m Olympic running track
  • NBA-spec basketball court with auditorium
  • 600-seat auditorium
  • Spaces for historical and cultural exploration
  • An elevated football field that doubles as a helipad
  • Specialist robotics and science laboratories
  • AR and VR-enabled learning centres
  • Disruption Lab and Research Centre for developing entrepreneurial skills
Temple numbers

Expected completion: 2022

Height: 24 meters

Ground floor banquet hall: 370 square metres to accommodate about 750 people

Ground floor multipurpose hall: 92 square metres for up to 200 people

First floor main Prayer Hall: 465 square metres to hold 1,500 people at a time

First floor terrace areas: 2,30 square metres  

Temple will be spread over 6,900 square metres

Structure includes two basements, ground and first floor 

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ABU DHABI ORDER OF PLAY

Starting at 10am:

Daria Kasatkina v Qiang Wang

Veronika Kudermetova v Annet Kontaveit (10)

Maria Sakkari (9) v Anastasia Potapova

Anastasia Pavlyuchenkova v Ons Jabeur (15)

Donna Vekic (16) v Bernarda Pera 

Ekaterina Alexandrova v Zarina Diyas

COMPANY%20PROFILE
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Lexus LX700h specs

Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor

Power: 464hp at 5,200rpm

Torque: 790Nm from 2,000-3,600rpm

Transmission: 10-speed auto

Fuel consumption: 11.7L/100km

On sale: Now

Price: From Dh590,000

Moon Music

Artist: Coldplay

Label: Parlophone/Atlantic

Number of tracks: 10

Rating: 3/5

MATCH INFO

Burnley 0

Man City 3

Raheem Sterling 35', 49'

Ferran Torres 65'

 

 

RESULTS

6.30pm: Meydan Sprint Group 2 US$175,000 1,000m
Winner: Ertijaal, Jim Crowley (jockey), Ali Rashid Al Raihe (trainer)

7.05pm: Handicap $60,000 1,400m
Winner: Secret Ambition, Richard Mullen, Satish Seemar

7.40pm: Handicap $160,000 1,400m
Winner: Raven’s Corner, Richard Mullen, Satish Seemar

8.15pm: Dubai Millennium Stakes Group 3 $200,000 2,000m
Winner: Folkswood, William Buick, Charlie Appleby

8.50pm: Zabeel Mile Group 2 $250,000 1,600m
Winner: Janoobi, Jim Crowley, Mike de Kock

9.25pm: Handicap $125,000 1,600m
Winner: Capezzano, Mickael Barzalona, Salem bin Ghadayer

AIR
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Sole survivors
  • Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
  • George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
  • Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
  • Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
Our legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.