UAE central bank may guarantee Dubai World debt
Source: BI-ME , Author: BI-ME staff
Posted: Sun November 29, 2009 2:08 pm

UAE. The Central Bank of the UAE may step in and guarantee the US$59 billion in debt of Dubai World, according to a report in The National.

The report said the measure would allow local UAE banks exposed to Dubai World to avoid taking provisions. A federal guarantee, backed by Abu Dhabi will also protect banks from a possible rating downgrade.

Lenders in Abu Dhabi and Dubai hold billions of dollars of Dubai World debt and the company’s decision to ask for a payment holiday could hurt bank share prices when trading resumes tomorrow.

“The Central Bank is considering measures to limit the risk of systemic damage to the banking system,” an adviser to the Government told The National, adding that an announcement was expected tomorrow (Monday).

Members of the Dubai Government met Central Bank officials in Abu Dhabi yesterday to discuss the measures, the newspaper said without citing anyone.

The Central Bank is keen to avoid banks taking provisions for bad loans to Dubai World, which would negatively affect profitability as well as avoiding further downgrades of credit ratings of the banks, the report said.

A spokesman for the Central Bank said it was “monitoring developments to ensure there is no negative impact on the UAE economy”, reported Reuters.

The Central Bank is “closely watching events stemming from the Dubai debt crisis to ensure no harm results for the national economy”, a spokesman for the bank told the news provider on saturday.

"wait until the Central Bank opens on Monday for further news," the spokesman added .

Stock markets in Dubai and Abu Dhabi reopen on Monday after closing at the end of trading on Wednesday for the Eid al-Adha holiday.

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MIDDLE EAST BUSINESS COMMENT & ANALYSIS

date:Posted: October 29, 2014
UAE. Total wealth in the GCC stood at US$ 1.7 tillion in 2014, up 4.75% from 2013; Total wealth in Saudi Arabia and UAE grew by 5%; Global household wealth up 8.3% to US$263 trillion, driven by the US and Europe, according to Credit Suisse Research Institute.
date:Posted: October 29, 2014
UAE. Significant increase in inflows of private capital into UAE in 2014; UAE seen as hub between Africa and Asia; Political stability remains a major factor driving flows; UAE clear winner in the region, as other GCC countries see net outflows of private capital.
date:Posted: October 28, 2014
INTERNATIONAL. Foreign policy is what a president wishes would happen; foreign affairs are what actually happen; the problem that Obama has, which has crippled his foreign policy, is that his principles have not been defined with enough rigor to provide definitive guidance in a crisis.
UAE. Total wealth in the GCC stood at US$ 1.7 tillion in 2014, up 4.75% from 2013; Total wealth in Saudi Arabia and UAE grew by 5%; Global household wealth up 8.3% to US$263 trillion, driven by the US and Europe, according to Credit Suisse Research Institute.
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