Credit Flow Picks Up from UAE Banks.Summary: DUBAI u The loan-to-deposit gap for the UAE (Uninterruptible Application Error) The name given to a crash in Windows 3.0. In subsequent versions of Windows, a crash was called a "General Protection Fault," "Application Error" or "Illegal Operation." See crash in Windows and abend. banks in September shrank shrank v. A past tense of shrink. shrank Verb a past tense of shrink shrank shrink at its fastest pace since June, data released by the UAE Central Bank showed on Tuesday. The gap at the end of last month stood at Dh43.5 billion, a decrease of Dh6.8 billion from Dh50.3 billion in August as banks mopped up Dh13.7 billion in additional monthly deposits, the biggest monthly increase since May. More encouragingly, net lending increased by Dh6.9 billion last month, after a similar increase in August. In the past two months alone, banks have lent more than they did in the first six months of this year, which indicates that the credit crunch Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. the economy underwent might be over and a new normality normality, in chemistry: see concentration. of cautious lending has taken hold. Hit by increasing loan defaults by both domestic and foreign clients such as the two troubled Saudi conglomerates , the UAE banks have set aside more money to cover these bad debts. At the end of September, banks had earmarked Dh27.8 billion for specific defaults and Dh8.9 billion as general provisions. Specific provisions are for loans that are already in default, while general provisions are for doubtful debts. Money Supply Grows Separately, the Central Bank reported that the total amount of currency in circulation plus demand deposits increased in September. The money supply increased by Dh2.8 billion to Dh221.1 billion after increasing by Dh1.3 billion to Dh218.3 billion in August. However, one measure of money supply that includes all currency notes and coins in circulation plus demand deposits -- also known as M1-- is still down by six per cent when compared to the same period last year, the Central Bank data showed. Another measure of money supply called M2, which includes M1 plus time and savings deposits Savings deposits Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand. , fell 0.7 per cent to Dh728.8 billion in September, from Dh734.2 billion in August. While the broadest measure of money supply, M3, which encompasses M2 and government deposits, grew by 1.3 per cent. "The decline in M2 shows that time deposits from the private sector went down," said Giyas Gokkent, chief economist The Chief Economist is a single position job class having primary responsibility for the development, coordination, and production of economic and financial analysis. It is distinguished from the other economist positions by the broader scope of responsibility encompassing the at National Bank of Abu Dhabi Abu Dhabi (ä`b  thä`bē, zä–, dä–), Arab. Abu Zabi, sheikhdom (1995 pop. 928,360), c. . "But M3 has gone up, so the government deposits
that are coming in are offsetting M2's decline."
Aa aruna@khaleejtimes.com Copyright 2009 Khaleej Times The Khaleej Times is a daily English language newspaper published in Dubai, United Arab Emirates. It is published by Galadari Printing and Publishing L.L.C. with the Gulf News being its main competitor. . All Rights Reserved. Provided by Syndigate.info an Albawaba.com company |
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