Central Bank of the United Arab Emirates: News, Updates, and Insights

The Central Bank of the United Arab Emirates (CBUAE) plays a vital role in regulating the country's financial system.

Headquartered in Abu Dhabi, the CBUAE was established in 1980 to oversee the country's monetary policy, banking, and financial institutions.

The CBUAE is responsible for maintaining the stability of the UAE's currency, the dirham, and ensuring its integrity in the global market.

The bank has implemented various measures to promote financial stability and growth, including the establishment of a regulatory framework for Islamic banking and finance.

Paymob has obtained the retail payment services license from the Central Bank of the UAE, allowing it to provide merchant acquiring, payment aggregation services, and domestic fund transfers within the UAE.

This license bolsters Paymob's position in the UAE's digital payments sector, enabling it to offer merchants a comprehensive suite of omnichannel solutions.

Paymob has supported over 390,000 merchants across the MENA region since 2018, including local SMEs and global brands like Decathlon and IKEA.

The Central Bank of the UAE has also given regulatory approval to AE Coin, the first regulated cryptocurrency in the Emirates, which is pegged to the dirham and less volatile than other cryptocurrencies.

UAE businesses could soon be able to accept AE Coin, making it a new option for payments in the country.

The GCC has made a notable move to keep interest rates steady. The Central Bank of the UAE will maintain its base rate on the overnight deposit facility at 4.4 percent.

This decision was made in alignment with the US Federal Reserve. No other central banks in the GCC have made similar announcements.

The move is likely to have a positive impact on the economy, as steady interest rates can help businesses and individuals make informed financial decisions.

The Gulf Cooperation Council (GCC) central banks have a history of mirroring the US Federal Reserve's interest rate cuts.

In fact, most Gulf central banks have lowered their key interest rates after the US Federal Reserve cut its benchmark rate.

The Central Bank of the UAE reduced the base rate on its overnight deposit facility by 25 basis points (bps) to 4.65 percent.

Saudi Arabia has also cut repurchase (repo) and reverse repo rates in line with the US Fed's moves.

The UAE's Central Bank has maintained its base rate on overnight deposit facility at 4.4 percent, despite some rate cuts in the past.

The US Federal Reserve has cut its benchmark rate by 25 basis points (bps) on multiple occasions, with the GCC central banks following suit.

The Central Bank of the UAE reduced the base rate on its overnight deposit facility by 50 bps from 5.40 to 4.90 percent.

Saudi Arabia has mirrored the US Fed's rate cuts, including a 50 basis point reduction.

The GCC central banks have shown a willingness to adjust their interest rates in response to changes in the global economic landscape.

The Central Bank of the UAE has reduced the base rate on its overnight deposit facility by 25 bps to 4.4 percent from 4.65 percent.

The GCC central banks have a history of coordinating their actions with the US Federal Reserve.

The UAE is making significant strides in the fintech and digital payments sector. Paymob, an Egypt-based fintech company, has obtained a retail payment services license from the Central Bank of the UAE, allowing it to provide merchant acquiring, payment aggregation services, and domestic fund transfers within the UAE.

This license is a major boost for Paymob, enabling it to offer UAE merchants a comprehensive suite of omnichannel solutions. Paymob has supported over 390,000 merchants across the MENA region since 2018, including local SMEs and prominent global brands.

The Central Bank of the UAE has also given the green light to the UAE's first regulated cryptocurrency, AE Coin. This cryptocurrency is pegged to the dirham, making it less volatile than other cryptocurrencies.

The Central Bank of the UAE will maintain its base rate on overnight deposit facility at 4.4 percent, aligning with the US Federal Reserve's interest rate decision.

UAE lending has seen a rise, but profits have taken a hit due to impairment charges. The aggregate net income of UAE banks dropped 5.5 percent in the third quarter of this year, according to a report by Alvarez & Marsal.

Impairment charges have dented profitability, with the top 10 lenders in the UAE experiencing a decline in aggregate income to AED20.3 billion ($5.5 billion) in Q3 2024.

The Central Bank plays a crucial role in regulating the UAE's banking sector and ensuring a secure and vibrant banking environment.

The Central Bank of the United Arab Emirates was established in 1980, replacing the Currency Board that was set up in 1973.

The Currency Board was tasked with managing the UAE's gold and foreign exchange reserves, but it didn't have full central bank regulatory authority.

The Central Bank was established to issue and manage the currency, ensuring its stability, and to manage the Emirates' credit policy.

It also oversees the banking system, implements anti-money laundering measures, and promotes sound banking practices.

The Central Bank has the power to issue currency in the form of banknotes and coins, and it keeps the currency stable by allowing it to be freely convertible into other currencies.

The bank's main goal is to help the national economy achieve balanced growth by organizing banking and monitoring the efficiency of the national banking system.

The Central Bank acts as the bank of the Government of the United Arab Emirates, providing monetary and financial support when needed.

It also keeps reserves in gold and other currencies and acts as a financial agent in the International Monetary Fund and the World Bank.

The bank is working towards maintaining a fixed exchange rate between the UAE dirham and the United States dollar.