UAE - Mubasher: The Central Bank of the UAE (CBUAE) has lowered the reserves requirements for demand deposits for all banks to 7% from 14% to protect the UAE economy from the repercussions of the coronavirus (COVID-19).

The CBUAE's decision aims to inject around AED 61 billion liquidity to back banks’ lending to the UAE economy, according to a press release on Sunday.

Meanwhile, the central bank has decided to extend the Targeted Economic Support Scheme (TESS), enabling banks and finance companies to extend the AED 50 billion zero-cost funding facility against collateral until 31 December.

Since 14 March, the CBUAE has approved capital and liquidity measures at a total value of AED 256 billion, including AED 50 billion capital buffer relief and AED 95 billion liquidity buffer relief for the banks.

"Banks participating in the TESS programme will be able to use a third of their current regulatory liquidity buffers. Banks will have the flexibility to maintain a minimum LCR of 70% and a minimum ELAR of 7%."

The governor of the CBUAE, Abdulhamid Saeed, said: "The additional measures announced today will effectively relieve the pressure on financial institutions, allowing them to continue to carry out their crucial role as the backbone of the economy while offering the required relief and continued access to funding for businesses and households.”