The balance of mandatory reserves for banks at the Emirates Central Bank increased by 7.7% to reach 132.6 billion dirhams during the first quarter of 2020 compared to the first quarter of 2019. < / p>
According to the Emirates News Agency, the statistics of the Central Bank showed that the obligatory reserve witnessed continuous growth during the past months, which reflects the solvency of the banking system in the UAE.
According to the regulations of the Central Bank, the compulsory reserve limit ratio is related to the reserves that banks must keep with the bank against customer deposits, without obtaining an interest rate for that.
In detail, the compulsory reserve balance of banks at the Central Bank in September of 2019 amounted to 126.2 billion dirhams, then rose to 129.7 billion dirhams in December of the same year.
With the beginning of the first month of the year 2020, the reserve balance increased to 130.8 billion dirhams, but it returned to the level of 130.1 billion dirhams in February of the same year, before again rising to 132.6 billion dirhams in March.
It is noteworthy that the mandatory reserve of banks with the Central Bank is among the list of tools that the bank is entitled to use to achieve the objectives of its monetary policy, in addition to other tools such as the dollar / dirham barter mechanisms to provide dirhams to banks, advances and overdraft facilities for banks and precautionary measures as well as certificates of deposit and repurchase facilities Certificates of Deposits issued by the Central Bank of Repo and the liquidity support facilities with banks.
