Business | Banking
UAE interbank rates ease after Dubai World statement
The UAE interbank offered rates fell on Tuesday in the wake of a statement from Dubai World
- Agencies
- Published: 13:04 December 1, 2009
The UAE interbank offered rates fell on Tuesday in the wake of a statement from Dubai World, which eased contagion fears, and more comments from government officials.
The three-month rate fell to 1.90500 per cent on Tuesday's fixing from 1.94125 per cent in the previous fixing on Monday, the central bank said on its website. The three-month rate is now lower than it was on November 25 when Dubai World announced its plans to ask creditors to delay debt payments till May 2010.
The rate, fixed prior to the announcement, had been 1.91875 per cent.
Dubai World, the government-controlled conglomerate that led the transformation of Dubai into a regional hub for finance, investment and tourism, unveiled details of a plan to restructure $26 billion in debt, covering obligations held by its main property firms, Nakheel and Limitless.
"This is definitely good news, it shows they are still committed to their payments and it removes all fears that this is a complete default," Hassaim Arabi, chief executive at Gulfmena Alternative Investments.
Government officials reiterated on Monday that the restructuring process will be in the interest of all parties involved. UAE central bank governor Sultan Nasser al-Suweidi said on Monday that there was no reason for concern as UAE banks had already increased their capital in the wake of last year's global financial crisis.
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