The gross banks’ assets, including bankers’ acceptances, increased by 0.8 per cent, from Dh4.075 trillion at the end of December 2023 to Dh4.109 trillion at the end of January 2024, according to the Central Bank of the UAE (CBUAE).
The bank in its monetary and banking developments for January 2024 reported that gross credit grew by 0.2 per cent from Dh1.991 trillion at the end of December 2023 to Dh1.996 trillion at the end of January 2024.
CBUAE reported that the gross credit rose due to an increase in foreign credit by 1.9 per cent, overshadowing a lessening of domestic credit by 0.01 per cent. Domestic credit diminished because of 0.1 per cent, 1.3 per cent and 13.6 per cent contraction in credit to the government sector, the public sector (government related entities) and the non-banking financial institutions, respectively. On the other hand, credit to the private sector increased by 0.5 per cent, during January 2024.
Total bank deposits climbed by 0.7 per cent, increasing from Dh2.521 trillion at the end of December 2023 to Dh2.539 trillion at the end of January 2024. The rise in total bank deposits was due to the growth in resident deposits by 0.9 per cent, superseding the decrease in non-resident deposits by 1.8 per cent.
Resident deposits expanded owing to increases in government sector deposits by 4.7 per cent, in public sector (government related entities) deposits by 1.0 per cent and in private sector deposits by 1.0 per cent. However, non-banking financial institutions deposits fell by 24.9 per cent.
The monetary base expanded by 1.8 per cent, from Dh658.8 billion at the end of December 2023 to Dh670.9 billion at the end of January 2024. The main driver of this increase in the monetary base was the rise in monetary bills & Islamic certificates of deposit by 12.8 per cent, overriding the reductions in currency issued by 0.4 per cent, in reserve account by 1.4 per cent and in banks & OFCs’ current accounts & overnight deposits of banks at CBUAE by 9.5 per cent.
The money supply aggregate M1 increased by 0.1 per cent, from Dh829.3 billion at the end of December 2023 to Dh830.0 billion at the end of January 2024. This was due to Dh0.9 billion rise in currency in circulation outside banks, overshadowing Dh0.2 billion fall in monetary deposits.
The money supply aggregate M2 increased by 0.2 per cent, from Dh2,023.4 billion at the end of December 2023 to Dh2,028.3 billion at the end of January 2024. M2 increased due to an increased M1 and Dh4.2 billion rise in quasi-monetary deposits.
The money supply aggregate M3 also increased by 1.3 per cent, from Dh2.445 trillion at the end of December 2023 to Dh2.478 trillion at the end of January 2024. M3 increased because of an augmented M2 and Dh27.9 billion rise in government deposits.