«Economic statement» monitor the effects of the decision «Central» after 10 daysTruth Consultancy
Interbank highest level in 5 years
Abu Dhabi – Abdel Fattah Montasser
Date: December 27, 2015
Monitoring «economic statement» the effects of central bank’s decision to raise interest rates on inter-bank interest rates in the banking system in general, where monitoring showed that the interest displayed interbank rates hit their highest level in nearly five years.
Interest offered interbank rates and recorded (EIBOR) was strong during the past ten days since the central bank’s decision on the seventeenth of the month of December to raise interest rates on certificates of deposit issued by banks in the country for the first time in more than nine years in line with the rise in dollar interest rates following the US federal reserve’s decision to raise the interest rate on the federal funds rate by 25 basis points.
The increased interest in all maturities, especially medium and short, which hit a new record high during the last ten days to continue gains related to the tenth consecutive month in a sign of increasing recovery and rising demand for liquidity in the banking sector to coincide with the confirmation of the central bank that the available liquidity in the banking sector still give it the ability to increase lending a moderate pace despite the slowdown in the growth of bank deposits of banks with the third quarter of the current year as a result of the continued decline in oil prices.
The average index
According to data announced by the Central Bank interest rates have risen for six months, which is, on average, an indicator of price levels for various maturities of 1.1243% on the seventeenth of December to almost 1.2071% yesterday, up about 8.3 basis points increase of about 7.37%.
Central Bank data showed that interest rates among commercial banks for long-term state (for the year) yesterday rose to 1.4414% compared with 1.3571% on a decision by the central bank to raise interest rates on certificates of deposit more than 8.4 points, up almost an increase of about 6.21% as interest rates rose among commercial banks operating in the country for three months and surpassed the 1% years ago and amounted to 1.0471% 0.9857% compared to almost a rise of more than 6.1 points, an increase of approximately 6.23%.
And interest rates reached for «one night» yesterday 0.1986% against 0.135% on the seventeenth of December, up 6.4 points reached a record increase of about 47.1%.
The data indicated that interest rates among commercial banks operating in the country for the month rose to 0.6679% compared to almost 0.5943% on the seventeenth of December, up almost reaching 7.36 points increase of approximately 12.38% over the 10 days as interest rates rose among commercial banks the state for a week significantly to 0.2843% 0.2179% yesterday versus a rise of about 6.64 points almost significant increase of about 30.5%.
He expressed satisfaction Muslim general manager of Truth, The Economic Consulting believes that the return of the upward trend of interest rates on deposits would inflation rates generally reduces indirectly where central banks resort in most countries of the world to raise interest rates to combat rising inflation.
He stressed that despite the rate hike, but it still revolves around reasonable levels will not affect the investment lending process because it is still in the low limits, saying it will not adversely affect the banks because the bulk of the increase in the cost of obtaining funds to be borne by the banks is offset to a large extent the increase in the lending rate, though this tie will take some time when banks bear the difference resulting from the increase in interest rate.
For his part, the economic advisor Mohammed Saeed Mohammed virtual predicted that the coming period would witness further rise in the levels of interest rates on the dollar, and therefore the dirham, pointing out that the relevant US authorities are aiming to reach a short interest rate term to a point equivalent to a level that does not hamper the interest rate at which growth is not raise inflation to maintain economic growth, although it is not clear where lies precisely this point, but analysts in the financial sector predicted to be much higher than the current level even after the lifting.
And virtual added that it is clear that there is no negative impact of rising interest rates on lending rates for persons prices where the UAE Central Bank statistics show that personal loans and commercial consumption, both have seen over the past two years and the last period of this year great heights and rates a record, despite the relatively high interest rates locally and which included higher interest on car loans and housing loans and real estate loans at rates varying from sector to sector, as well as varying rates from one bank to another of the banks operating in the country.