The issuance of the first tranche of a $20 billion (Dh73bn) bond by Dubai Government should be sufficient to meet the emirate's refinancing needs this year and lend stability to the economy over that time, Standard Chartered bank said in a research note yesterday.
"Yet, we believe more direct measures to improve liquidity need to be taken. The gap between bank deposits and loans at the end of January showed a need for over Dh100bn. This gap needs to be bridged in order for the advance-to-deposit ratio to drop and allow banks to resume lending," the bank said.
Last week the Dubai Government issued a $20bn long-term bond programme, selling the first half to the UAE Central Bank. Standard Chartered view reinforces what UAE Economy Minister Sultan bin Saeed Al Mansouri said at the Abu Dhabi Economic Forum on Monday that government measures taken so far should be sufficient to stabilise Dubai's economy for at least nine months.
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