36659
UAE Foreign Assets Fall by $12b
World Economy

UAE Foreign Assets Fall by $12b

The UAE central bank’s foreign assets fell by $12 billion in January from the previous month as the economy continued to be impacted by falling oil prices.

Foreign assets declined to AED296.9 billion ($81 billion) from AED341.1 billion, according to data posted on the central bank’s website, Bloomberg reported.

It said cash, bank balances and deposits with banks abroad dropped almost 30% to AED122.2 billion, while investments in held-to-maturity foreign securities and other foreign assets increased.

The drop in oil prices has also boosted speculation that countries in the region will be pushed to adjust their currencies’ fixed exchange rates to the dollar.

Twelve-month forward contracts for the UAE dirham, used partly to bet on a devaluation of the currency, climbed to 325 points last month, their highest since 2009, Bloomberg added.

The UAE holds about 6% of global crude reserves.

Earlier this month, Fitch said the Abu Dhabi Investment Authority, one of the world’s largest sovereign wealth funds, is expected to see its assets decline by just over 5% this year.

The ratings agency said it projected a fall from an estimated $502 billion by end-2014 to $475 billion as outflows outpace investment returns.

The UAE, which is currently experiencing a deterioration in its fiscal balances, will return to budget surpluses in 2017 owing to recovering oil prices and a planned increase in production levels, Moody’s Investors Service has said in a new report.

The ratings agency said it forecasts relatively modest budget deficits in 2015 and 2016, owing to the low oil price environment and given that hydrocarbons remain the backbone of the UAE economy despite diversification efforts.

Short URL : http://goo.gl/wG1ocU
  1. http://goo.gl/4Ibbv3
  • http://goo.gl/cCxm6B
  • http://goo.gl/ABG7Cm
  • http://goo.gl/QnwOxp
  • http://goo.gl/EO1xkA

Trending

Googleplus