UAE revamps inter-bank lending rate

The United Arab Emirates Central Bank said Tuesday local and foreign banks support the establishment of a new mechanism to calculate the Emirates Interbank Offered Rate (EIBOR).

At present EIBOR is calculated using an average of rates from ten banks excluding the highest and lowest rates.

Banks currently involved include Abu Dhabi Commercial Bank, ABN AMRO, Citibank, Commercial Bank of Dubai, Emirates Bank, HSBC, Lloyds TSB, National Bank of Abu Dhabi, National Bank of Dubai and Standard Chartered.

Analysts said the new procedure could incorporate two or three additional local banks and exclude the two highest rates and lowest rates. It would also involve the UAE Central Bank monitoring the fixing of the interbank rates.