ABU DHABI, (Pakistan Point News - 12th Jul, 2021) The Central Bank of the UAE announced that the Money Supply aggregate M1 increased by 0.3%, from AED 644.4 billion at the end of April 2021 to AED 646.4 billion at the end of May 2021, according to monetary and banking developments for May 2021 The Money Supply aggregate M2 decreased by 0.3%, from AED 1462.5 billion at the end of April 2021 to AED 1458.5 billion at the end of May 2021.
The increase in M1 was due to AED 2.4 billion rise in Monetary Deposits, overshadowing AED 0.4 billion fall in Currency in Circulation Outside Banks. M2 decreased due to an AED 6.0 billion reduction in Quasi-Monetary Deposits, superseding the increase in M1. M3 fell due to a reduced M2 and an AED 10.6 billion reduction in Government Deposits.
The Monetary Base expanded by 2.9 % rising from AED 430.8 billion at the end of April 2021 to AED 443.4 billion at the end of May 2021. The main driving force behind this increase in the Monetary Base was 32.7% and 11.1% increases in Reserve Account and Certificates of Deposit & Monetary Bills, respectively. Currency Issued and Banks & OFCs’ Current Accounts & Overnight Deposits of Banks at CBUAE fell by 1.2% and 28.6%, correspondingly.
Gross credit decreased by 0.7% falling from AED 1763.2 billion at the end of April 2021 to AED 1751.5 billion at the end of May 2021. Gross Credit fell because of 0.8% reduction in Domestic Credit, overriding 0.5% increase in Foreign Credit. The fall in Domestic Credit was mainly due to a 1.4%, 2.8%, 0.2% and 0.6% reductions in credit to Government Sector, credit to Public Sector (GREs), credit to Private Sector and credit to Non-Banking Financial Institutions, respectively.
Total bank deposits decreased by 0.1%, falling from AED 1877.3 billion at the end of April 2021 to AED 1874.6 billion at the end of May 2021, attributable to 0.4% reduction in Resident Deposits, overriding a 1.5% rise in Non-Resident Deposits. Resident Deposits fell mainly due to 1.2%, 0.1%, 0.2% and 1.7% reductions in Government Sector Deposits, GREs Deposits, Private Sector deposits and Non-Banking Financial Institutions’ Deposits, respectively.