Central Bank withdraws AED23.8 billion in excess liquidity

The UAE Central Bank withdrew AED23.8 billion in excess liquidity in four months, as part of its policy to manage excess liquidity in the banking system.

In the meantime, certificates of deposit at the bank rose to the tune of AED126.64 billion by the end of September.

Official statistics show that the month of September saw withdrawn excess liquidity ratcheting up to an all-time high of AED12.3 billion, while AED8.2 billion was withdrawn in July and around AED3.1 billion in August.

Market analysts surveyed by WAM said improved deposit levels, especially government deposits, have contributed to boosting liquidity and consequently led to the CB's decision to withdraw surplus cash in line with the government's fiscal policy aimed at meeting the supreme interests of the State.

Total deposits at the country's banking sector rose to around AED1.596 trillion by the end of September, a growth of 6 percent over the corresponding period last year.

Under Federal Law No. 10 of 1980, the CB is entitled to wield any tools it deems fit for serving its fiscal policy and managing liquidity in the market. Among these tools is to maintain a minimum mandatory reserve levels, advance facilities, overdraft and preventive measures, and repo facilities