CBUAE: AED71.2 billion increase in cash deposits over 12 months

The Central Bank's cash aggregates statistics explained that cash deposits increased on a monthly basis by 1.92 percent or the equivalent of AED13.7 billion, compared to about AED712.1 billion in January 2024.

The Central Bank stated that quasi-cash deposits rose to AED1.258 trillion in February of 2024, with an annual increase of 27.4 percent, compared to AED987.4 billion in February 2023, an increase equivalent to AED270.3 billion.

The Central Bank pointed out that quasi-cash deposits increased on a monthly basis by about 5 percent or the equivalent of AED59.4 billion, compared to about AED1.198 trillion in January of 2024.

According to the Central Bank, quasi-cash deposits are term deposits and savings deposits in dirhams for residents in addition to deposits by residents in foreign currency. Cash deposits, on the other hand, are defined as all short-term deposits that a bank customer can withdraw without prior notice.

Central Bank statistics showed that government deposits increased to AED430.3 billion in February of 2024, with a year-on-year growth of 11.1 percent, compared to AED387.3 billion in February 2023, an increase equivalent to AED43 billion.

The statistics also highlighted an increase in the money supply to approximately AED139.4 billion at the end of February 2024, with a year-on-year increase of 12.8 percent, compared to about AED123.6 billion in February 2023. Moreover, it increased by 3.1 percent on a monthly basis, compared to AED135.2 billion in January 2024.

The money supply is distributed as AED18.2 billion for cash in banks and AED121.2 billion for circulating cash outside banks by the end of February 2024.

In a related context, Central Bank statistics showed an increase in the monetary base on an annual basis by 28.3 percent to reach AED689.5 billion in February 2024, compared to about AED537.4 billion in February 2023, an increase equivalent to AED152.1 billion. Additionally, it increased by about 3 percent on a monthly basis compared to AED670.9 billion in January 2024.

The monetary base includes approximately AED257 billion for cash certificates and Islamic deposit certificates, AED111 billion for current accounts for banks and other financial institutions at the Central Bank, as well as overnight deposits for banks at the Central Bank, and AED139.4 billion for the money supply. This includes circulating cash outside banks in addition to cash in banks and a reserve account of AED182.1 billion.

The Central Bank attributed the main reason for the monthly increases in reserve accounts, current accounts, and overnight deposits for banks at the Central Bank, starting from April 2023, to the increase in the banks' reserve requirements for demand deposits from 7 percent to 11 percent.