U.A.E. Interbank Lending Rates Drop as Dubai Debt Accord Boosts Confidence - Bloomberg

United Arab Emirates interbank rates fell to an almost seven-month low after borrowing became cheaper for lenders as the Dubai World debt restructuring progresses.

The U.A.E.’s 3-month interbank offered rate dropped to 2.25375 today, the lowest since March 16, reflecting an easing of the shortage of deposits and willingness of banks to lend. The rate banks charge each other has fallen for eight days.

There is “improved confidence with the improved Dubai restructuring developments,” said Monica Malik, Dubai-based chief economist at EFG-Hermes Holding SAE. “The key issue for banks is medium- and long-term liquidity rather than short-term, this is where the tightness is most acute.”