M3 money supply, the broadest measure of money supply growth in the UAE, slowed to 10.9 per cent in October, according to the central bank.

This is the third consecutive month that credit growth has slowed in the country.

According to the latest figures released by the Central Bank of the UAE, M3 money supply slowed to 10.9 per cent from 13.4 per cent in the previous month.

The figures indicate that inflationary pressures on the economy are continuing to wane. Inflation in the country averaged 3.4 per cent in the first half, according to official figures from the UAE Finance Ministry, falling from 12.3 per cent in 2008.

The figures also showed that banks in the country set aside AED4bn ($1.08bn) for writedowns in the third quarter, the largest quarterly increase in 2009. Provisions rose to AED27.8bn at the end of September, from AED23.9bn three months earlier. In October, the level of provisions rose to AED29bn.

Liquidity has been tight in the UAE since foreign capital was taken out the country at the end of 2008, because of the global financial crisis.