UAE Central Bank extends support scheme for banks until June 30

The United Arab Emirates’ central bank has extended several measures of its Targeted Economic Support Scheme (TESS) until June 30 to support the continued recovery of the country’s economy, the bank said on Saturday.

It said in a statement it was extending the TESS programme to support new lending and financing, as well as prudential relief measures regarding banks capital buffers and liquidity and stable funding requirements.

Earlier this year, the central bank announced that it will extend some stimulus measures to mitigate the impact of the coronavirus until mid-2022.

The TESS helps banks provide temporary relief to companies and individuals affected by the COVID-19 pandemic and facilitates additional lending capacity through the relief of existing capital and liquidity buffers.

Banks will continue to be eligible to access a collateralised Dh50 billion ($13.61 billion) zero-cost liquidity facility until June 30 next year, the central bank had said in April.

The central bank has projected the UAE’s GDP growth at 2.1 per cent for this year and which doubles during 2022 in its latest Quarterly Economic Review. The forecast for the current year has been attributed to a decline in projected real oil GDP, stemming from OPEC+ announcements and the anticipated output schedule.

For 2022, CBUAE has its projections to 4.2 per cent in overall real GDP growth, up from 3.8 per cent previously, with the non-oil real GDP rising by 3.9 per cent. The revision is the result of increased public spending, banks’ credit outlook, higher employment and better business sentiment.