Abu Dhabi: The Central Bank of the UAE (CBUAE) announced a 1.8% increase in the money supply aggregate M1, rising from AED965.3 billion at the end of January 2025 to AED982.9 billion by the end of February 2025. This rise resulted from a AED4.1 billion growth in currency in circulation outside banks and a AED13.5 billion increase in monetary deposits.
According to Emirates News Agency, the CBUAE's Monetary and Banking Developments report for February 2025 highlighted a 1.8% growth in the money supply aggregate M2, which went from AED2,319.3 billion at the end of January to AED2,361.9 billion at the end of February. The M2 increase was attributed to higher M1 levels and a AED25.0 billion rise in Quasi-Monetary Deposits.
The money supply aggregate M3 also saw a 0.8% rise, increasing from AED2,789.8 billion at the end of January to AED2,813.4 billion by February's end. This growth mainly stemmed from the M2 increase, which offset a AED19.0 billion decrease in government deposits.
The monetary base experienced a 3.1% growth, rising from AED791.9 billion at the end of January to AED816.6 billion at the end of February. This was driven by increases in currency issued, banks and other financial corporations' current accounts, overnight deposits at the CBUAE, and monetary bills and Islamic certificates of deposit, despite a 6.1% drop in the reserve account.
Gross banks' assets, including bankers' acceptances, rose by 1.6%, from AED4,562.3 billion at the end of January to AED4,636.8 billion by the end of February.
Gross credit increased by 0.9%, moving from AED2,186.3 billion at the end of January to AED2,205.1 billion at the end of February. This increase was due to a combined rise in domestic credit by AED1.7 billion and foreign credit by AED17.1 billion, with domestic credit growth driven by a 0.7% increase in private sector credit and a 5.2% rise for non-banking financial institutions. However, credit to public sector entities and the government sector decreased by 2.0% and 1.4%, respectively.
Banks' deposits saw a 1.2% increase, from AED2,840.7 billion at the end of January to AED2,874.6 billion by February's end. The growth in bank deposits was due to a 0.8% rise in resident deposits and a 5.1% increase in non-resident deposits, reaching AED2,625.5 billion and AED249.1 billion, respectively.
Within resident deposits, deposits from government-related entities increased by 3.8%, private sector deposits rose by 1.4%, and deposits from non-banking financial institutions grew by 5.6%, although government sector deposits decreased by 4.0% by the end of February 2025.
