Central bank to pump cash into Dubai lenders
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The central bank of the United Arab Emirates (UAE) says it will provide lenders with extra liquidity to help prop up a banking sector rattled by the announcement Wednesday that Dubai's main investment vehicle would delay debt payments.
AFP - The central bank of the United Arab Emirates said on Sunday it is providing banks with extra liquidity, stressing its support to the banking sector after Dubai World asked to suspend debt payments.
The bank said in a statement it had issued a notice to UAE banks and foreign banks operating in the UAE "making available to them special additional liquidity facility linked to their accounts at the central bank."
The statement gave no indication of how much extra liquidity was being set aside for the banking system.
"The UAE banking system is more sound and liquid than a year ago," the central bank said, pointing out that UAE banks have made fewer short-term borrowings from international lenders, with foreign interbank deposits and short-term bonds dropping by 25 percent.