Growth in money supply prompts UAE inflation fears

25 March 2008
Money supply growth in the UAE is continuing to rise to near record highs, according to the Central bank, fuelling fears over continuing inflation.

The figure for M3 money supply - the broadest measure of all cash in circulation in the economy - rose to 37 per cent for 2007.

Marios Maratheftis, regional head of research at Standard Chartered, describes the figures as “excessive and alarming” and says they will contribute to further price rises of both assets and goods.

Figures released by the Central Bank of the UAE indicate that lending by banks in the country also grew by 40 per cent during 2007. Inflation is thought to have been 10.9 per cent in 2007, and is expected to continue rising.

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