The Central Financial institution of the United Arab Emirates (CBUAE) has issued its 2024 Monetary Stability Report, which features a complete evaluation of economic system stability and monetary developments throughout sectors amidst elevated world challenges and dangers.
The report affirmed the robustness of the UAE banking sector, supported by sturdy capital and liquidity buffers, alongside improved asset high quality and continued progress. Monetary stability dangers within the nation remained broadly contained and unchanged, attributable to strong financial fundamentals, prudent insurance policies, and efficient threat administration.
The report critiques home and world macroeconomic tendencies, monetary market circumstances, the efficiency of assorted sectors, and regulatory developments, with a concentrate on resilience features and rising dangers.
It additionally underscores the CBUAE’s dedication to fostering proactive threat monitoring, innovation, and transparency, supporting monetary system resilience, and collaborating with native and worldwide companions to boost the UAE’s place as a number one world monetary hub.
The sturdy efficiency of the monetary system contributed to enhancing the nation’s financial resilience. The UAE’s actual GDP grew by 4 p.c in 2024, pushed by progress momentum within the non-oil sector, a key driver for financial diversification. The general GDP progress outlook can be anticipated to stay constructive for the approaching years, reaching 4.4 p.c in 2025 and rising to five.4 p.c in 2026.
In 2024, the UAE’s monetary system skilled strong and steady circumstances. A major step in enhancing coordination amongst key stakeholders was the operationalisation of the UAE Monetary Stability Council, chaired by H.H. Sheikh Mansour bin Zayed Al Nahyan, Vice President, Deputy Prime Minister, Chairman of the Presidential Courtroom, Chairman of the Central Financial institution and Chairman of the Monetary Stability Council.
This transfer represented a vital stride in direction of bolstering coordination amongst stakeholders, activating systemic threat oversight, facilitating the evaluation of rising dangers, and streamlining well timed coverage responses to horizontal dangers.
2024 additionally noticed the CBUAE reinforce its regulatory and supervisory frameworks by the implementation of latest macroprudential instruments, strengthening cybersecurity necessities, advancing in sustainable finance, and increasing the scope of local weather change threat evaluation, according to worldwide finest practices.
The great stress checks performed by the CBUAE in 2024 confirmed the power of the UAE’s banks to soak up macroeconomic shocks, proceed offering credit score amenities even beneath hypothetical hostile situations, and preserve excessive ranges of capital and liquidity exceeding minimal necessities, highlighting the banking sector’s resilience in addressing world dangers.
The UAE’s non-bank monetary establishments (NBFIs) sector achieved vital constructive outcomes at numerous ranges. The insurance coverage sector remained resilient, with sufficient solvency positions and substantial progress of 21.4 p.c, bringing whole gross written premiums to AED64.8 billion, thereby reinforcing policyholders’ rights.
General, finance corporations maintained sufficient capitalisation with additional enhancements in liquidity ranges, whereas cash alternate companies continued to reveal their resilience and operational stability.
2024 additionally witnessed an acceleration in digital transformation, mirrored in elevated adoption charges of FinTech and digital funds, the growth of banking providers, and the mixing of synthetic intelligence and information analytics.
The CBUAE continued to develop the nationwide cost and settlement infrastructure by the launch of the Home Card Scheme “Jaywan”, the widespread adoption of the “Aani” On the spot Fee Platform, and the progress made within the central financial institution digital foreign money (CBDC) “Digital Dirham”, all of which enhanced the monetary system’s effectivity and resilience.
The report anticipates that the outlook for the UAE’s monetary system will stay constructive, supported by strong financial fundamentals, prudent financial administration, and the CBUAE’s efforts to assist monetary system resilience, improve proactive threat monitoring, innovation, and transparency.
Khaled Mohamed Balama, Governor of the CBUAE, mentioned, “The UAE maintained sturdy financial and monetary circumstances in 2024, regardless of rising financial challenges and rising world dangers, supported by nationwide financial progress and the banking system’s robustness and resilience.
“At CBUAE, we’re dedicated to steadily progressing in direction of attaining the imaginative and prescient of our clever management, the nation’s improvement plans, and our strategic aims by creating the monetary system’s regulatory and supervisory framework to make sure sustainable resilience, improve monetary and financial stability, and drive progress momentum and prosperity within the UAE.”