The Central Bank of the UAE (CBUAE) said on Wednesday that the money supply aggregate M1 increased by 3.7%, from AED 847.0 billion at the end of February 2024 to AED 878.1 billion at the end of March 2024. This was due to an AED 6.0 billion rise in currency in circulation outside banks, combined with an AED 25.1 billion increase in monetary deposits.
CBUAE said, in a statement, that the money supply aggregate M2 increased by 1.4%, from AED 2.10 trillion at the end of February 2024 to AED 2.13 trillion at the end of March 2024.
M2 increased mainly due to an elevated M1, overriding the AED1.0 billion reduction in quasi-monetary deposits.
The money supply aggregate M3 increased by 1.9%, from AED 2.54 billion at the end of February 2024 to AED 2.58 billion at the end of March 2024. M3 increased mainly because of an amplified M2, combined with an increase of AED 18.6 billion in government deposits.
The monetary base expanded by 2.1%, from AED 689.5 billion at the end of February 2024 to AED 703.7 billion at the end of March 2024. The rise in the monetary base was driven by the growth in key sub-categories: currency issued increased by 5.4%, reserve accounts by 21.0%, and monetary bills and Islamic certificates of deposit by 2.8%, overshadowing the decline recorded in banks and OFCs’ current accounts and overnight deposits of banks at CBUAE by 34.8%.
Gross banks’ assets, including bankers’ acceptances, increased by 1.3%, from AED 4.2 trillion at the end of February 2024 to AED 4.25 trillion at the end of March 2024.
Gross credit grew by 1.7% from AED 2.01 trillion at the end of February 2024 to AED 2.05 billion at the end of March 2024. Gross credit growth was driven by increased domestic credit by 1.1% and foreign credit by 5.3%.
Domestic credit expansion was due to increased credit to the public sector (government-related entities), the non-banking financial institutions, and the private sector by 2.8%, 1.7%, and 1.4%, respectively.
Total bank deposits climbed by 1.9%, increasing from AED 2.6 billion at the end of February 2024 to AED 2.66 billion at the end of March 2024. The increase was due to the growth in resident deposits by 1.5% and in non-resident deposits by 6.4%.
Resident deposits expanded due to the growth in deposits in non-banking financial institutions by 17.8%, government sector deposits by 3.3%, and private sector deposits by 2.0%.
