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UAE's M3 money supply shrinks 0.5% m/m in November 2013

January 31, 2014

The UAE's broad money supply (M3) fell 0.5% m/m to AED 1.217tn ( USD 331.3bn ) in November 2013 , swinging from 2.0% growth a month earlier, on falling bank deposits, the central bank said in its monthly statement. M3 is the sum of M2 and government deposits at banks operating in the UAE as well as at the central bank. M2 and M1 growth, however, remained positive in November. The money supply aggregate M0 (currency in circulation and currency at banks) grew 1.0% m/m to AED 63.4bn in November despite cooling from 3.8% growth the month before. Money supply aggregate M1 growth (currency in circulation plus monetary deposits), however, quickened to 3.3% m/m in November from 2.0% m/m a month earlier, totalling AED 373.3bn M2, which comprises of M1 and quasi-monetary deposits, grew 3.3% m/m to AED 1.004tn in November, easing from a 5.1% rise a month earlier. Total bank deposits fell 0.9% m/m (up 1.2% in October) to AED 1.274tn, dented by a 0.7% m/m decline in resident deposits and 3.2% drop in non-resident deposits. Total bank loans and advances (excluding provisions and interest in suspense), however, edged up 0.2% m/m to AED 1.174tn in November. Total bank assets in the UAE grew just 0.2% m/m to AED 1.991tn in November, breaking from 4.1% growth the month before. The growth in the UAE's money indictors remains widely in line with the CPI inflation reflecting prudent central bank and commercial banks' lending. The UAE's federal government is also cautions in infrastructure spending unlike Qatar where aggressive public spending has fuelled inflationary pressures and raised concerns about excessive project financing and related lending.

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Source: IntelliNews - Weekly Reports

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