UAE to impose new rules on mandatory reserves for financial institutions

The United Arab Emirates Central Bank said on Thursday that from October 28, it will introduce new regulations on reserve requirements for deposit-taking financial institutions, according to the state news agency (WAM).

The central bank said these institutions will be allowed to draw on up to 100 percent of their reserve balances held with the central bank on any day for daily settlement purposes or to deal with any swings on overnight money market rates.

The banks will have to ensure they meet the daily average requirements over a 14-day reserve maintenance period.

The introduction of these regulations represents the second step towards the implementation of the new Dirham Monetary Framework announced earlier this year.