The Emirates interbank offered rate, or Eibor, has eased to 3.10 per cent from 4.20 per cent at the start of the year as liquidity within the banking system has increased, bankers said.
However, the liquidity is “trapped”, according to a senior economist and does not percolate into the real economy.
“Banks are putting their money in the interbank market, driving the interbank rates down. Hence, a lower Eibor is not necessarily a sign that things have improved. It is a sign that liquidity is there but it is trapped,” said Marios Maratheftis, Regional Head of Research at Standard Chartered bank.
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