Abu Dhabi: The UAE should have active bond market to face any financial crisis and that bonds market had proved it is a very good instrument to alleviate the repercussions of any economic and financial hardships, Sultan Bin Nasser Al Suwaidi, UAE Governor of the Central Bank, told Gulf News.
Al Suwaidi said: “An active bond market is very fundamental to deal with any future financial crisis and to alleviate the pressures on banks’ liquidity through the creation of a high degree of liquidity in the economy which would assist in addressing the negative impact in a crisis situation.”
He added that the Central Bank had encouraged financing through issuing bonds and sukuk rather than taking loans or borrowing from banks.
“We encourage issuing bonds as this will help meet up the challenges and finance any project in a way that does not harm our banking sector which had driven us to act in 2008 following the flow of massive funds out of the country which led to liquidity crisis and lack of confidence in the economy,” continued Al Suwaidi.
Al Suwaidi said: “An active bond market is very fundamental to deal with any future financial crisis and to alleviate the pressures on banks’ liquidity through the creation of a high degree of liquidity in the economy which would assist in addressing the negative impact in a crisis situation.”
He added that the Central Bank had encouraged financing through issuing bonds and sukuk rather than taking loans or borrowing from banks.
“We encourage issuing bonds as this will help meet up the challenges and finance any project in a way that does not harm our banking sector which had driven us to act in 2008 following the flow of massive funds out of the country which led to liquidity crisis and lack of confidence in the economy,” continued Al Suwaidi.
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