Crises won’t affect GCC economies: Al Suwaidi

11/Mar/2011
Khaleej Times
The ongoing Middle East political crises have no negative impacts on GCC financial sectors and economies, the UAE Central Bank said on Thursday.

After concluding the two-day 52nd meeting of the Committee of Governors of Central Banks and Monetary Agencies in GCC countries, Central Bank Governor Sultan bin Nasser Al Suwaidi said business goes on as usual despite the problems in some regional countries.

“The [political] crises in Libya, Yemen, Oman and Bahrain have not left any adverse impact on the GCC banking sector. No, there has been no adverse impact on the regional banking sector. No capital outflow. There is nothing unusual. The business is as usual,” he told reporters.

About Libyan assets in the UAE and if there have been any requests to freeze them, Al Suwaidi said: “You know there is a well-known system of processing such requests. We normally deal with requests coming from specific countries. When we receive such requests, we will process them according to the system. Once we receive them, we process them in normal way.”

“Regarding the UN Security Council resolutions, we want to receive them and then process accordingly.”

About Libyan investments and joint ventures in the country, Al Suwaidi said he would not name any particular asset or any particular country. However, he said the Central Bank deals with accounts, assets and all kinds of investments according to the well-known procedures like those identified by the Financial Action Task Force.

“So we follow the same steps as anybody else does.”

When asked if there was a risk in the dirham’s peg to the US dollar under the current situation, he said it was not an issue related to issues and events in some regional countries.

“The dollar goes up and down like any other currency in the world. If it does not go down then you will not see euro going up. It all depends on market conditions. The market condition in one area is not the same to a market condition of another area. So you see these differences forever. That is not going to change our stance over our currency’s pegging to the US dollar,” he said.

Al Suwaidi said he did not see inflation rising at this particular point just because of the political crises. “I don’t see consumer basket being affected.”

On recent regulations on bank service fees and charges, he said banks that defy the rules have to face penalties.

Referring to the meeting agenda, Al Suwaidi said the committee chaired by him in the presence of Mohammed Al Mazrouei, the Deputy Secretary General for Financial Affairs at the GCC Secretariat, discussed a number of issues and made recommendations for further improvement in the region’s financial sector.

He said: “The committee confirmed the need to formulate the minimum prudential requirements due for the unification or convergence among GCC countries, in accordance with the best international practices.

“The committee also confirmed the need to follow-up the implementation of Basle III and its impact on the banking sector in GCC countries.”

He further added the meeting also decided to form a work team to prepare and implement the joint work programme between GCC countries and the European Union in areas of economic, financial and monetary cooperation.
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