The United Arab Emirates
central bank making it easier for Islamic banks to access its special lending
facility by expanding the range of collateral they can use.
From April 1 Islamic banks, which
account for roughly a quarter of banking assets in the UAE, will be allowed to
use sharia-compliant securities other than central bank-issued Islamic
certificates of deposit to borrow overnight from the central bank's
Collateralised Murabaha Facility.
The expansion of the collateral will
permit Islamic banks to obtain central bank liquidity in the same way that
conventional banks do from the Interim Marginal Lending Facility, which was
launched last July, the central bank said in a statement on Tuesday.
From April 1, eligible collateral will range from
sukuk issued by foreign governments, which must have a minimum long-term credit
rating of A, to UAE corporate entities and even some sukuk which are rated
below investment grade or do not have ratings, at the central bank's
discretion.
From April 1, eligible collateral will range from sukuk issued by foreign governments, which must have a minimum long-term credit rating of A, to UAE corporate entities and even some sukuk which are rated below investment grade or do not have ratings, at the central bank's discretion.
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