The Governor of the Central Bank of the United Arab Emirates, His Excellency Mubarak Rashed Al Mansoori discusses the transformation of the UAE Central Bank under its new Medium-Term Plan. Among others, the Central Bank will focus on SMEs and the private sector in line with the government’s thrust to move the economy away from dependence on oil production.
April 26, 2016 | Farrah Brake
Multiple government institutions are restrategising and taking proactive measures for the future. Combined with de-risking, dollar clearing, and anti-money laundering, discussion on the transformation and role of central banks is a phenomenon taking place across the globe as central banks particularly in the developing world respond to changes. In the United Arab Emirates (UAE), the Central Bank is taking proactive measures to address the ever-changing environment marked by the global economic crisis.
“The objectives of the Central Bank revolve around diversification of the economy, which will rely less on oil going forward,” according to Central Bank Governor His Excellency Mubarak Rashed Al Mansoori. The Central Bank vision is in line with the UAE government’s medium- to long-term plan, which has brought significant changes in the cabinet and emphasis on the health care and educational sectors to make these industries more cost-effective while providing enhanced services.
The Central Bank’s primary responsibility will continue to be ensuring the financial stability of the banking sector and ensuring that banks retain a strong capital adequacy ratio. However, the central bank will do things differently going forward, reveals H.E. Al Mansoori, and this is to encourage more growth within the private sector. This growth will be bank-driven and will also focus on the small and medium-size enterprises (SME) sector, he said.
The area of SME financing has long been a concern of the Gulf Cooperation Council region specifically the UAE, which is looking at diversification and enhanced gross domestic product growth from this sector. There has been much discussion about the lack of funding for SMEs and what can be done to provide more access to funds. The governor explains the issue is not a lack of available funds but lack of incentives as banks are not incentivised to lend to the private sector or SME sector, which are perceived as risky i...
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Keywords: UAE Central Bank
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