KHALEEJ TIMES, Saturday, Nov 9, 2019 | Rabi Al Awwal 12, 1441
Lower interest rates helping UAE cope up with subdued oil prices
Lower interest rates are helping the UAE economy, which is expected to grow by
2.4 per cent this year, the central bank governor said on Sunday.
"It is positive for the economy coming from a lower oil price economy. This is
positive for the economy that is reviving from the low oil prices," Mubarak
Rashed Al Mansoori said while speaking at the UAE Banks Federation Middle East
Banking Forum in Abu Dhabi.
Last week, the UAE cut interest rates by 25 basis points, following the US
"We expect the national economy to grow by 2.4 per cent in 2019, driven by
faster growth in the non-oil sector," the governor said.
The UAE economy grew 1.7 per cent in 2018, according to central bank figures.
According to the central bank, non-oil GDP growth is estimated to have grown
from 0.3 per cent in January-March 2019 quarter to 1.5 per cent in April-June
quarter. However, oil GDP growth is estimated to have moderated from 12.4 per
cent in first quarter of 2019 to 4 per cent in the second quarter.
"Credit growth has been 5 per cent on a year-on-year basis for the period ending
September 2019. And deposit growth in the same period has been 4 per cent,"
About the anticipated economic growth for next year, Al Mansoori didn't give the
exact figure but he said the results will be positive.
He said the real estate sector in the UAE is at an attractive level and that the
demand for properties has increased this year, especially in Dubai.
No room for cryptos
On the whether the country considers the adoption of the crypto currencies, the
governor said the UAE is not supportive of that kind of mechanism because of the
"We don't support the crypto currency. We can't trust our economy with such a
system," said Al Mansoori, adding that recent reports have shown that some
terrorist groups were hiding behind the system to conduct illegal activities.
This year's forum explored the most prevalent trends affecting the sector
including fintech, Islamic finance and risk management whilst taking pace with
technological innovation, financial crimes and automation.
Abdul Aziz Al Ghurair, chairman of the UAE Banks Federation, said the banking
sector as a whole has a responsibility to help grow and develop society.
"By better preparing banks for the future, we are securing a better future for
the UAE and Middle East," he said.