Money supply M0, an indicator of currency circulation in banks, has increased by 1.4 percent in April. UAE Central Bank, yesterday revealed that Money supply is Dh50.3 billion against Dh49.6 billion at the end of March.
Money supply M1, which is an indicator of currency in circulation plus monetary deposits such as current accounts and call accounts at banks increased from 3.8 percent in April. Money supply M2, which contains M1 plus quasi-monetary deposits (sum of resident time and savings deposits in dirhams, commercial prepayments in dirhams and resident deposits in foreign currencies) increased by 1.9 percent in April. M1 is at Dh261.2 billion, while M2 is at Dh850.5 billion. Money supply M3, which is M2 plus government deposits in the banking sector also showed an increase of 2.6 percent in April to Dh1.076.1 trillion.
The Central Bank noted that there is improved liquidity, however, it also cautioned that this will increase inflation. The bank deposits showed an increase by 2.1 percent in April to reach Dh1.1283 trillion. The total bank loans and advances increased by about 0.6 percent and the total bank assets decreased by 0.04 percent at the end of April.
The Central Bank declared that in the first four months of 2011, the monetary aggregate M2 showed an increase by 8.2 percent, bank deposits by 7.5 percent and bank loans and advances by 2.2 percent. The total non-performing loans (NPLs), in the period ending April 30, rose by 7 percent compared with 6.25 percent as on December 31, 2010.
Source: Khaleej Times