RIYADH: The UAE’s M1 money supply saw a monthly rise of 1.5 percent at the end of October, reaching 909.9 billion dirhams ($247.7 billion), according to the latest figures released by the country’s central bank.
The summary report revealed the rise was primarily driven by a 14.9 billion dirhams increase in monetary deposits, which offset a 1.3 billion dirhams decline in currency circulating outside banks.
M1 supply includes liquid money that can be used for spending or transactions. It consists of cash, including coins and paper bills, and funds in checking accounts that are readily accessible for daily transactions.
The UAE’s M2 money supply, which includes M1 and quasi-monetary deposits, rose by 0.9 percent, reaching 2.27 trillion dirhams at the end of October, up from 2.25 trillion dirhams in September.
This growth was driven by an increase in M1 and a 7.5 billion dirhams rise in quasi-monetary deposits.
The country’s M3 money supply, which encompasses M2 and government deposits, grew by 1.3 percent, reaching 2.75 trillion dirhams at the end of October, compared to 2.72 trillion dirhams in September.
The report highlighted that the increase was largely attributed to the expansion of M2 and a 13.8 billion dirhams rise in government deposits.
The M3 money supply is calculated by adding government deposits held at banks operating in the UAE and the Central Bank to the M2 money supply.
The UAE’s monetary base saw a slight decline of 0.1 percent, falling to 743 billion dirhams at the end of October from 743.5 billion dirhams in September.
The decrease was primarily driven by a 11.4 percent drop in banks’ and other financial corporations’ current accounts and overnight deposits with the central bank.
This decline overshadowed increases in currency issuance by 0.8 percent, reserve accounts by 0.05 percent, and monetary bills and Islamic certificates of deposit by 6.2 percent.
The UAE’s gross banking assets, including bankers’ acceptances, grew by 1.3 percent, reaching 4.46 trillion dirhams at the end of October, up from 4.4 trillion dirhams in September.
The UAE’s gross credit rose by 0.6 percent, reaching 2.17 trillion dirhams at the end of October, compared to 2.16 trillion dirhams in September.
This increase was driven by a 0.6 percent rise in domestic credit and a 0.7 percent increase in foreign credit.
Domestic credit growth was driven by a 0.2 percent increase in lending to the government sector, a 3.0 percent rise in lending to the public sector, and a 0.1 percent increase in lending to the private sector, which outweighed a 1.8 percent decline in credit to non-banking financial institutions.
The country’s total bank deposits climbed by 1.5 percent, reaching 2.80 trillion dirhams at the end of October, up from 2.76 trillion dirhams in September.
This growth was driven by a 1.2 percent rise in resident deposits and a 4.7 percent increase in non-resident deposits.
The increase in resident deposits was attributed to higher deposits from the government sector by 2.3 percent, government-related entities by 3.6 percent, and the private sector by 1.1 percent, which offset a 13 percent decline in funds from non-banking financial institutions.
