UAE Central Bank keeps eye on inter-bank rates
It will weigh all options to lower lending rate
* Reuters
* Published: 00:00 April 1, 2010
* Gulf News
Dubai/Abu Dhabi: The UAE Central Bank will keep looking at how to reduce the Gulf country's interbank offered rates and plans to meet with commercial banks on a regular basis, sources said yesterday.
The Central Bank said last month that Eibor rates, based on quotes provided by a dozen banks, do not reflect true market lending rates, and that it wanted to consult the banks on how to bring them down.
Three banking sources told Reuters that the Central Bank urged commercial banks at a meeting yesterday to lower the rates but was knocked back.
"They just asked banks ‘will you bring the rates down?' And we said no," said one banker who attended the meeting. "It is the market that determines the rates, we said." Central Bank officials were not immediately available to comment on the meeting.
Short-term rates edged down from nearly five-month highs after Dubai's government gave details of an offer for debt restructuring of its flagship company last week.
But bankers said the market situation was little changed as banks keep chasing deposits they need for longer-term funding.
It will weigh all options to lower lending rate
* Reuters
* Published: 00:00 April 1, 2010
* Gulf News
Dubai/Abu Dhabi: The UAE Central Bank will keep looking at how to reduce the Gulf country's interbank offered rates and plans to meet with commercial banks on a regular basis, sources said yesterday.
The Central Bank said last month that Eibor rates, based on quotes provided by a dozen banks, do not reflect true market lending rates, and that it wanted to consult the banks on how to bring them down.
Three banking sources told Reuters that the Central Bank urged commercial banks at a meeting yesterday to lower the rates but was knocked back.
"They just asked banks ‘will you bring the rates down?' And we said no," said one banker who attended the meeting. "It is the market that determines the rates, we said." Central Bank officials were not immediately available to comment on the meeting.
Short-term rates edged down from nearly five-month highs after Dubai's government gave details of an offer for debt restructuring of its flagship company last week.
But bankers said the market situation was little changed as banks keep chasing deposits they need for longer-term funding.