UAE Central Bank to launch new overnight deposit facility

UAE Central Bank to launch new overnight deposit facility

This new facility will support banks operating in the UAE in proactively managing their day-to-day liquidity'





 The UAE Central Bank said on Monday it would introduce a new overnight deposit facility as of July 12 to enable conventional banks operating in the UAE to deposit their surplus liquidity at the apex bank on an overnight basis.

In a statement, the CBUAE said the introduction of the Overnight Deposit Facility (ODF) is the first step towards implementation of the new "Dirham Monetary Framework" announced earlier this year.

"The ODF shall be the prime facility for managing surplus liquidity in the UAE banking sector prior to the launch of the Monetary Bills Programme and shall replace issuance of one-week Certificate of Deposits," the banking regulator said.

The proposed Monetary Bills Programme is aimed at draining surplus liquidity using government securities or central bank bills.

Abdulhamid Saeed, Governor of the CBUAE, said the introduction of the new facility is a reflection of the CBUAE's continuous efforts to achieve the objectives of its monetary policy and to foster money market developments in the UAE. "This new facility will support banks operating in the UAE in proactively managing their day-to-day liquidity and help in aligning overnight money market