UAE's foreign financial reserves slipped slightly at the end of March but they remained strong enough to provide coverage for its imports and nearly double their level five years ago, according to IMF.

From around $14.14 billion at the end of 2001, the country's total reserves minus gold receded to nearly $13.39 billion at the end of March, the figures showed.

The level provided a coverage for an import period of more than 4.5 months at average imports of Dh133 billion in 2001, a monthly average of $3 billion.

Despite their decline, the reserves are nearly double their level at the end of 1995, when they stood at $7.4 billion, IMF's International Financial Statistics showed.

At the end of March, they were also the third largest financial reserves in the Arab world after those in Algeria and Saudi Arabia of $19.46 billion and $14.48 billion respectively.

A breakdown showed UAE's total reserves included around $13.11 billion in foreign exchange, $90.7 million in gold reserves, and $275 million in reserve position in the IMF.

Bankers said a surge in oil prices over the past two years enabled the UAE to rebuild its financial reserves after such a surge swelled its coffers and allowed it to cut budget deficits and turn balance of payment and current account gaps into surpluses.

In 2000, when oil prices shot above $27 to their highest level since the end of the oil boom 20 years ago, UAE's current account surplus hit a record $13.2 billion, accounting for as high as 20 per cent of GDP.

A loss of around $4 in crude prices in 2001 depressed that surplus to around $9 billion but it remained as high as 13.2 per cent of the GDP.

Estimates by the London-based Economist Intelligence Unit, showed UAE's current account will remain in surplus this year and in 2003, projected at nearly $7.4 billion and $6.9 billion respectively.

The estimates were based on assumed high oil export earnings of around $15.5 billion in 202 and $15.48 billion in 2003.

This means total exports will remain as high as $47 billion and $48.8 billion respectively, while imports will stay at nearly $36.6 billion in 2002 and increase to around $38.7 billion in 2003.

IMF figures showed UAE's foreign assets were also strong at the end of March although they shrank to around Dh49.5 billion from Dh52.47 billion at the end of 2001. They were as high as Dh55.2 billion at the end of October.

At the end of March, foreign assets included around Dh36.6 billion in reserve money and Dh10.7 billion in government deposits.