Monday 21 December 2009

Banks leave standby funds untouched

Banks have not yet dipped into the emergency liquidity facility the Central Bank has set up to cushion the impact of Dubai World’s debt rescheduling on the country’s banking sector.

Analysts say the reluctance of lenders to draw on the special fund suggests that the banking system has not suffered from a significant withdrawal of deposits.

The regulator pledged its support for lenders in the UAE and offered emergency funds to avert any liquidity shortages last month after an announcement that Dubai World was seeking to delay debt repayments to bondholders and creditors as part of restructuring plans.

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