The Central Bank of the UAE (CBUAE) announced a significant increase in various money supply aggregates for March 2024. The M1 money supply, which includes currency in circulation and monetary deposits, rose by 3.7%, reaching Dh878.1 billion from Dh847 billion at the end of February 2024. This increase was driven by a Dh6 billion rise in currency in circulation and a Dh25.1 billion increase in monetary deposits.
The M2 money supply, which includes M1 and quasi-monetary deposits, increased by 1.4%, from Dh2,104.7 billion in February to Dh2,134.8 billion in March. The rise in M2 was primarily due to the increase in M1, despite a Dh1 billion reduction in quasi-monetary deposits.
The M3 money supply, which encompasses M2 plus government deposits, rose by 1.9%, reaching Dh2,583.7 billion in March from Dh2,535 billion in February. This growth was attributed to the increase in M2 and an additional Dh18.6 billion in government deposits.
Monetary base
The monetary base expanded by 2.1%, from Dh689.5 billion in February to Dh703.7 billion in March. The increase in the monetary base was driven by substantial growth in key sub-categories: currency issued rose by 5.4%, reserve accounts by 21.0%, and monetary bills and Islamic certificates of deposit by 2.8%. This growth offset a 34.8% decline in banks and other financial corporations’ current accounts and overnight deposits at the CBUAE.
Gross bank assets, including bankers’ acceptances, increased by 1.3%, reaching Dh4,254.5 billion at the end of March, up from Dh4,198 billion in February. Gross credit saw a 1.7% rise, from Dh2,013.5 billion in February to Dh2,047 billion in March. This growth was driven by a 1.1% increase in domestic credit and a significant 5.3% increase in foreign credit.
Domestic credit expansion was due to increased credit to the public sector (government-related entities) by 2.8%, non-banking financial institutions by 1.7%, and the private sector by 1.4%.
Bank deposits
Total bank deposits climbed by 1.9%, from Dh2,608 billion in February to Dh2,657.1 billion in March. This increase was driven by a 1.5% rise in resident deposits and a 6.4% rise in non-resident deposits.
Resident deposits grew due to a 17.8% increase in deposits from non-banking financial institutions, a 3.3% rise in government sector deposits, and a 2% increase in private sector deposits.
