Dubai crisis prompts central bank to offer extra liquidity

by Gill Montia

Story link: Dubai crisis prompts central bank to offer extra liquidity

The Central Bank of the United Arab Emirates (UEA) has announced that it is making additional liquidity available to commercial banks, including foreign banks, operating in the UAE.

The facility comes with an interest rate at 50 basis points above three months EIBOR (Emirates interbank offered rate).

The move is linked to debt problems at Dubai World, the state-owned holding company for Dubai’s global investment portfolio.

Neighbouring Emirates, Abu Dhabi, has indicated that it will also be offering assistance to Dubai, on a selected basis.

Dubai World’s financial position came under scrutiny last week when the group asked for extra time to repay a $3.5 billion loan that becomes due in December.