GCC banking sector face further liquidity tightening | GulfNews.com:
"Fiscal deficits across the GCC are seen widening further in 2016 despite fiscal reforms and spending retrenchment following the sharp decline in oil prices.
The growing fiscal gap is expected to be covered largely through domestic borrowing programme, which in effect will adversely impact banking sector liquidity across the region, according to a recent report from Abu Dhabi Commercial Bank (ADCB).
“Domestic funding will remain important for covering the GCC’s fiscal deficit in 2016, though a number of member countries have indicated a greater focus on external borrowing. These will include further drawdowns of government deposits in their banking sectors, as well as borrowing from banks,” said Monica Malik, Chief economist of ADCB."
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