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Short-term deposits in UAE’s banks hit AED248.4 billion

Accounting for 35.25 per cent of the total deposits, while long-term deposits account for 22.14 per cent

Short-term deposits (for three months or less) accounted for 35.25 per cent of the total deposits in UAE’s banking sector, which amounted to AED704.76 billion at the end of the month of August.

By the end of last August, short-term deposits reached AED248.44bn, while long-term deposits reached AED155.99bn, accounting for 22.14 per cent of the total deposits, reports UAE-based Alwatan Alarabi.

Banking sources confirm that most of the banks operating in the country have developed plans during the past two years to increase long-term deposits in order to increase stable liquidity levels, which will enable them to reduce their interest rates on loans in general.

The sources point out that banks are trying to solve the difficult equation of steady increases in liquidity, but the greatest percentage of them are short-term, represented in deposits for weeks or a few months, while the largest proportion of loans granted by banks to individuals and companies are long-term loans which last for years.