UAE rejigs interbank rate panel to spur lending

The United Arab Emirates central bank will set up a new panel for the interbank offered rate, an official said on Wednesday, in the hope that the change will lower the rates and spur lending.

The central bank expressed dismay earlier this month at persistently high interbank rates, saying they did not reflect the market. It announced a new mechanism to determine the rates, prompting speculation it may overhaul the panel of providers.

The new 11-bank panel will include four new local banks and drop two international lenders, and will get to work by mid-September, the official in the central bank's treasury department told Reuters, requesting anonymity.