IMF lauds Central Bank's move to inject liquidity

Dubai: The International Monetary Fund (IMF) last night has welcomed the Central Bank’s move to inject more liquidity into the financial system.

“We are continuing to monitor the situation following the unexpected announcement by the Government of Dubai regarding a standstill on the debt of Dubai World and its Nakheel subsidiary, which has had an adverse impact on financial markets,” it said in a statement.

The UAE Central Bank Sunday told all banks operating in the UAE that it has made provisions for fresh liquidity at 50 basis points above the Emirates Inter-Bank Offered Rate (Eibor), should they need more cash.

”The United Arab Emirates is a strong resource-based economy and we welcome today’s announcement by the Central Bank of the UAE making available to banks a special additional liquidity facility. We look forward to further clarification by the authorities towards a cooperative mechanism to address the issues between these debtors and their creditors,” IMF said