Clouds over lending in UAE begin to lift - FT.com

The lending environment in the United Arab Emirates has improved markedly since the beginning of the year, as the interest rate that banks charge each other to borrow has been brought down.

The gap between the UAE three-month interbank rate and the US three-month interbank rate has narrowed to about 124 basis points, the smallest since 2008, according to Bloomberg data. That shows liquidity is improving and banks are in a better shape to lend. This is welcome news for borrowers after the UAE suffered a severe credit crunch .

The interbank rate matters because banks commonly use it as a benchmark to price their deposit and lending rates.

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