UAE – Mubasher: New guidelines and measures set by the Central Bank of the UAE (CBUAE) amid the global coronavirus outbreak will mitigate its impact and support Emirati economy, Moody's Investors Service said in a recent report, according to Zawya.

Nevertheless, the report noted that these guidelines could reduce the transparency of banks' asset quality if sustained.

On 1 March, the CBUAE called upon banks and finance companies to take measures to reduce the virus’ economic effects, including rescheduling loan contracts, monthly loan payments, as well as reducing some fees and commissions.

Commenting on the CBUAE guidelines, AVP-analyst at Moody's, Mik Kabeya, said: “The guidance will support the economy amid the coronavirus outbreak and contain contingent liability risk for the government by preventing potential liquidity challenges from turning into solvency issues for some UAE private sector and government-related entities."

Kabeya further remarked that “For banks, however, the guidance is credit negative because it will lower systemwide transparency of banks' asset quality if sustained over the long term."