The value of deposits by the United Arab Emirates’ government in local banks retreated by 9.4 per cent or AED17.1 billion in June, official data shows.
Government deposits stood at AED165.1bn in June this year against AED182.2bn in May, the country’s central bank says in a report.
The decline in government deposits has slightly pushed broad money supply (total liquidity in the local market) down by 0.9 per cent to AED1.35 trillion in June compared with AED1.36trn in May.
According to the central bank data, cash in circulation and cash deposits dipped by 1.2 per cent to stabilise at AED464bn by the end of June against AED469bn a month earlier.
The drop is mainly driven by a lower value of resident deposits at AED13.3bn as a result of transfers by expatriates to their home countries.
The figures, published by Al-Ittihad, reveal that the total value of deposits with local banks amounted to AED1.44trn in June.
Moreover, the Gulf country’s local banks offered loans worth AED14.4bn in June, marking an increase of one per cent and pushing the lending portfolio to AED1.44trn compared with AED1.43trn in May.
This is the first time in the past three years that the value of the loans portfolio has surpassed the banking sector’s deposits, according to the report.