Monetary and Banking Developments for August 2014

The U.A.E. Central Bank has announced that the money supply aggregate M0 (currency in circulation + currency at banks) decreased by 7.6 percent, from AED 72.1 billion at the end of July 2014 to AED 66.6 billion at the end of August of the same year. The money supply aggregate M1 (currency in circulation plus monetary deposits, i.e., current accounts and call accounts at banks) decreased by 0.5 percent, from AED 433.6 billion at the end of July 2014 to AED 431.4 billion at the end of August of the same year.

The money supply aggregate M2 which comprises M1 and quasi-monetary deposits (resident time and savings deposits in Dirhams, commercial prepayments in Dirhams and resident deposits in foreign currencies), increased by 0.1 percent, from AED 1,129.4 billion at the end of July 2014 to AED 1,130.7 billion at the end of August of the same year.

The money supply aggregate M3 (M2 plus government deposits at banks operating in the U.A.E. as well as at the Central Bank) increased by 0.9 percent, from AED 1,338.0 billion at the end of July 2014 to AED 1,349.6 billion at the end of August of the same year.

Total bank assets (on a gross basis and including bankers acceptances) increased by 1.5 percent, during the month of August 2014 reaching AED 2,272.5 billion, while total bank loans and advances (on a gross basis) increased by 0.6 percent, reaching AED 1,348.4 billion.

According to the Central Bank, total bank deposits increased by 1.2 percent during the month of August 2014, reaching AED 1,422.0 billion, as a result of an increase in resident deposits by AED 12.2 billion and an increase in non-resident deposits by AED 5.0 billion.

The Bank has said that since February 2014, data on total bank loans and advances and total bank assets is presented on a "gross basis" instead of the previous practice of presenting them on a "net of provisions basis". In addition, starting April 2014, bankers acceptances are included in total bank assets.

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