Interbank rates fall to 2.74% over one year

Tickets of 1000 dirhams

Yousef Al Bustanji (Abu Dhabi)

Interest rates on interbank transactions in UAE dirhams have fallen 11 points since early August to 2.74% yesterday, their lowest level since March 2018, according to the bank's data. central, given the low dollar interest rates.
Low long-term interest rates among banks operating in the local market reflect the high levels of long-term liquidity available to the sector and the banks' increased ability to meet Basel III standards, which require banks to maintain high levels of liquidity almost permanently.
Lower interest rates increase private sector financing and lending, as well as the amount of liquidity available for consumption in the market, supporting economic recovery by increasing the demand for goods and services.
The interest rates on interbank transactions in dirhams reached their highest level on December 19, 2018, at 3.67%, which indicates that the decline in the rate of "EIBOR" reached 93 basis points in almost nine months, which equates to a reduction in the cost of financing of around 25%. % During the period.
Eligible liquid badets in the banking sector grew by 6.5 percent in the second quarter of 2019, to over AED 521 billion at the end of June, data from the central bank said.