Summary Report - Monetary & Banking Developments
The Central Bank announced that the Money Supply aggregate M1 remained almost unchanged around AED 723.1 billion at the end of October 2022. This was due to AED 1.6 billion rise in Currency in Circulation Outside Banks, overriding the AED 1.5 billion fall in Monetary Deposits.
The Money Supply aggregate M2 decreased by 1.0%, from AED 1,645.6 billion at the end of September 2022 to AED 1,629.4 billion at the end of October 2022. M2 decreased due to a decline by AED 16.3 billion in QuasiMonetary Deposits.
The Money Supply aggregate M3 rose by 0.5%, from AED 2,048.1 billion at the end of September 2022 to AED 2,058.8 billion at the end of October 2022. M3 growth was due to AED 26.9 billion increase in Government Deposits, overshadowing the lessened M2.
The Monetary Base expanded by 0.5% rising from AED 466.5 billion at the end of September 2022 to AED 468.8 billion at the end of October 2022. The main drivers of this expansion in the Monetary Base was increases in Currency Issued, Reserve Account, and Certificates of Deposit and Monetary Bills by 0.5%, 1.2% and 7.7%, respectively. However, Banks & OFCs’ Current Accounts & Overnight Deposits of Banks at CBUAE decreased by 12.7%, weakening the expansion of the Monetary Base.
Gross banks’ assets, including bankers’ acceptances, rose by 0.9%, rising from AED 3,583.0 billion at the end of September 2022 to AED 3,615.2 billion at the end of October 2022.
Domestic Credit grew because of 0.7% and 0.1% hike in credit to the Public Sector (Government Related Entities) and Private Sector, correspondingly; overriding the reductions in credit to the Government Sector and Non Banking Financial Institutions by 0.7% and 2.2%, respectively.
Total Bank Deposits increased by 0.8%, climbing from AED 2,186.9 billion at the end of September 2022 to AED 2,204.7 billion at the end of October 2022. The growth in Total Bank Deposits was due to the rise in Resident Deposits by 0.4% and in Non-Resident Deposits by 4.2%. Resident Deposits increased owing to 6.7% and 1.2% expansions in Government Sector Deposits and Private Sector Deposits, respectively. While, Public Sector (Government Related Entities) Deposits and Non-Banking Financial Institutions Deposits, diminished by 9.8% and 24.0%, respectively.
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