UAE money supply rises 8 per cent

22 June 2008
Money supply in the UAE rose by 8.4 per cent in the first quarter of 2008, indicating that the burgeoning level of capital in the economy will continue to put upward pressure on inflation.

Figures from the UAE central bank show that M3 money supply, which measures the level of money in the economy, rose to AED754.57bn ($205.4bn) at the end of March.

Compared to the same time last year, this is a rise of 40 per cent.

The Ministry of Economy said recently that inflation for 2007 was 11.1 per cent, after rising to 14.6 per cent in the last quarter of 2007.

Assets held by banks in the UAE rose to AED1.34 trillion, an increase of 9 per cent.

Bank deposits grew by 7 per cent, while loans and advances rose by 10 per cent, demonstrating the difficulty local banks are having attracting deposits while interest rates are so low.

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