ABU DHABI/December 26-2020: The Central Bank of the UAE seems to have kept its powder dry, by holding the largest portion of its assets in the most liquid form, maybe to equip itself to combat any unforeseen financial crisis in the banking sector.
Out of the total assets at AED443.66 billion as of October end, a big chunk or two-thirds of that – at AED290.69 billion, has been held by the Central Bank in the form of cash and bank balances.
This could be the largest holding in cash and bank balances the Central Bank has ever had in its history. While this accounts for 65.5 per cent of the total assets of Central Bank as of October end, 2020, in January, cash and balances accounted for only 53.47 per cent of total assets.
Following the onslaught of the COVID 19, in April, the Central Bank had reduced its deposits holding all of a sudden by about AED35 billion, from AED120.06 billion to AED84.72 billion effecting a 30 per cent cut in that portfolio.
This was when he Central Bank announced the Targeted Economic Support Scheme (TESS), the highlight of which was the Central Bank’s AED50 billion zero-cost collaterised loan to the banks.
