ABU DHABI, Dec. 14 (Xinhua) -- The Central Bank of the United Arab Emirates (UAE) said Monday that it would stand behind banks in the country including those with exposure to the state-owned conglomerate Dubai World and its subsidiary Nakheel, the official news agency WAM reported.
The UAE Central Bank, which has been in consultation with the Dubai government over the last two weeks, is pleased to see the Dubai government's announcement regarding Nakheel Sukuk (Islamic bond) earlier in the day, the bank was quoted as saying in a statement.
The country's banking system is comprised of retail commercial banks only, with a strong base of retail deposits, which is the "best banking model that weathered the current global financial crisis," the statement said.
It added that from the consolidated balance-sheet of banks, interbank deposits of the UAE banking system constitute 10.3 percent of the liabilities side, with foreign interbank deposits constituting 5 percent only.
"The UAE banking system is more sound and liquid than a year ago," the statement said, without giving further details.
Earlier in the day, Sheikh Ahmad bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee, said the Abu Dhabi government has agreed to fund 10 billion dollars to Dubai to meet upcoming obligations on Dubai World.
"As a first action for the new fund, the government of Dubai has authorized 4.1 billion dollars to be used to pay the Sukuk obligations that are due today," he said.
The government of Dubai, a member of the oil-rich federation UAE, announced on Nov. 25 that it would ask Dubai World's creditors to agree to a debt moratorium of at least six months as a first step towards restructuring.
The announcement, described by ratings agency Standard and Poor's as a default, provided the focus for global financial markets and media, affecting stock markets around the world.
On Dec. 1, Dubai World confirmed that its debt restructuring process related to a total debt of 26 billion dollars, of which a 4.1-billion-dollar Sukuk is due on Dec. 14.
Special Report: Global Financial Crisis
Abu Dhabi to provide $10 bln for Dubai World's upcoming obligations
Burj Dubai, world's tallest tower, is seen in Dubai December 5, 2009. (Xinhua/Reuters File Photo)
ABU DHABI, Dec. 14 (Xinhua) -- The Abu Dhabi government has agreed to fund 10 billion U.S. dollars to Dubai to meet its upcoming obligations on the state-owned conglomerate Dubai World, a senior official said Monday.
"The government of Abu Dhabi has agreed to fund 10 billion dollars to the Dubai Financial Support Fund that will be used to satisfy a series of upcoming obligations on Dubai World," Sheikh Ahmad bin Saeed Al Maktoum, chairman of the Dubai Supreme Fiscal Committee (SFC), was quoted by the official news agency WAM as saying in a statement. Full story
Unified currency, Dubai debt woes to top GCC summit: Kuwait official
CAIRO, Dec. 12 (Xinhua) -- Ratification of a monetary union agreement as well as Dubai debt woes will top the agenda of the 30th Gulf Cooperation Council (GCC) summit due to kick off in Kuwait City on Monday, a Kuwait official said.
The six GCC member states are keen on going ahead with the monetary union, which will help facilitate internal trade and promote cooperation, Kuwaiti ambassador to Egypt Rashid al-Hamad said in a recent interview with Xinhua. Full story
Dubai stock market sees strong recovery after official's speech
DUBAI, Dec. 10 (Xinhua) -- Dubai stock market rebounded strongly Thursday after a top government official criticized global media for creating panic with "inaccurate reports" on the state-owned conglomerate Dubai World.
After losing 27 percent of value during the last two weeks, the Dubai Financial Market (DFM) was boosted by bargain hunting. The DFM Index gained 7 percent straight and closed at 1,640.76 points on the last day before the Islamic weekend. Full story
UAE stock markets continue to slump on Dubai World concerns
ABU DHABI, Dec. 8 (Xinhua) -- Stock markets in the United Arab Emirates (UAE) plunged in free fall Tuesday due to increasing selling pressure as a result of Dubai World's debt issue, a local newspaper reported.
The Dubai Financial Market (DFM) index fell 6.22 percent as of 1:00 p.m. (0900 GMT) to 1,636.22, while in Abu Dhabi, the index fell 3.22 percent to 2541.10, Gulf News said on its website. Full story
Dubai to fulfill commitments inside UAE, abroad: official
ABU DHABI, Dec. 7 (Xinhua) -- The Dubai government is capable of honoring and meeting its commitments inside and outside the United Arab Emirates (UAE), a senior official said Monday.
A distinction should be made between the Dubai government and Dubai World, one of Dubai's largest and most important conglomerates, Abdul Rahman Al Saleh, director general of Dubai Finance Department, told al-Jazeera TV, according to the official news agency WAM. Full story
Dubai crisis rings bells of prudent investment
File photo shows Kuwaiti traders follow the market's movement at the Stock Exchange in Kuwait City Dec. 1, 2009. (Xinhua File Photo/Noufal Ibrahim)
JERUSALEM, Dec. 6 (Xinhua) -- Until last month, Dubai was acclaimed worldwide as an exotic Manhattan on the sea, with huge skyscrapers towering in desert sands alongside golden beaches crowded with stunning hotels and upscale shopping malls.
Unsurprisingly, news of the financial collapse of the emirate's key construction firms came as a shock to many, but as far as regional economists were concerned, the Dubai bubble had been ready to burst for some time. Full story