ABU DHABI: Total assets of UAE Central Bank plunged down by 2.1 percent to Dh330.27 billion in January 2015, as compared to the Dh337.39 billion in December 2014.
In the month, cash and bank balances, deposits, held to maturity investments all dropped. However, loans and advances and other assets surged.
Total foreign currency assets also dropped 2.3 per cent to Dh313.28 billion in January from Dh320.64 billion in December 2014.
The UAE monetary base shrunk five per cent in January to Dh278.9 billion from Dh292.5 billion in December.
The monetary base decreased owing to a drop in the currency in circulation, which went down 4.1 per cent, banks’ excess reserves by 24.4 per cent and certificates of deposits held by banks by 6.4 per cent.
The reduction in these three components of the monetary base overshadowed the 1.4 per cent increase in banks’ required reserves resulting in an overall descent of the monetary base.
Money supply M0 decreased by 6.6 per cent during January, dropping from Dh74.5 billion at the end of December 2014 to Dh69.6 billion at the end of January 2015. This was due to 16.1 per cent decrease in cash at banks and a 4.1 per cent decrease in currency in circulation.
On the other hand, M1 increased by 1.7 per cent to Dh443.3 billion in January from Dh436.1 billion at the end of December.
This increase was a result of a 2.5 per cent increase in monetary deposits overshadowing the 4.1 per cent decrease in currency in circulation.
M2 increased by 1.1 per cent to Dh1.153 trillion in January from Dh1.141 trillion at the end of December. This increase was brought about by a raised M1 combined with a 0.7 per cent rise in quasi-monetary deposits.
Following the same trend, M3 also increased by 0.1 per cent to Dh1.1333 trillion ascending from Dh1.332 trillion at the end of December.
This increase was brought about by the combined increase in M1 and M2, diminishing the effect of a 5.8 per cent decrease in government deposits.
In summary, during the first month of 2015, monetary aggregates M1, M2 and M3 increased by 1.7 per cent, 1.1 per cent and 0.1 per cent, respectively. However, M0 fell by 6.6 per cent.
