CBUAE Announces Monetary And Banking Growth For March 2024

The Central Bank of the UAE (CBUAE) has reported a notable increase in the money supply aggregates for March 2024. The M1 aggregate saw a 3.7% rise, moving from AED847.0 billion at the end of February 2024 to AED878.1 billion by the end of March 2024. This growth was driven by a AED6.0 billion increase in currency circulation outside banks and a AED25.1 billion rise in monetary deposits.

According to the CBUAE, the M2 aggregate increased by 1.4%, from AED2,104.7 billion at the end of February 2024 to AED2,134.8 billion at the end of March 2024. This increase was primarily due to the elevated M1, which offset a AED1.0 billion reduction in quasi-monetary deposits.

The M3 aggregate also experienced growth, rising by 1.9% from AED2,535.0 billion at the end of February 2024 to AED2,583.7 billion at the end of March 2024. The increase in M3 was attributed to the amplified M2 and an additional AED18.6 billion in government deposits.

The monetary base expanded by 2.1%, from AED689.5 billion at the end of February 2024 to AED703.7 billion at the end of March 2024. Key sub-categories contributing to this growth included a 5.4% increase in currency issued, a 21.0% rise in reserve accounts, and a 2.8% increase in monetary bills and Islamic certificates of deposit. These gains overshadowed a significant decline of 34.8% in banks' and other financial corporations' current accounts and overnight deposits at CBUAE.

Gross banks’ assets, including bankers’ acceptances, grew by 1.3%, from AED4,198.0 billion at the end of February 2024 to AED4,254.5 billion at the end of March 2024.

Credit Growth

Gross credit saw an increase of 1.7%, rising from AED2,013.5 billion at the end of February 2024 to AED2,047.0 billion by the end of March 2024. This growth was driven by a 1.1% increase in domestic credit and a substantial 5.3% rise in foreign credit.

Domestic credit expansion was due to increases in credit to various sectors: public sector (government-related entities) by 2.8%, non-banking financial institutions by 1.7%, and private sector by 1.4%.

Bank Deposits

Total bank deposits climbed by 1.9%, increasing from AED2,608.0 billion at the end of February 2024 to AED2,657.1 billion at the end of March 2024.

This rise was attributed to growth in resident deposits by 1.5% and non-resident deposits by 6.4%. Resident deposits expanded due to increases in non-banking financial institutions' deposits by 17.8%, government sector deposits by 3.3%, and private sector deposits by 2.0%.

With inputs from WAM