The UAE's broad money supply (M3) shrank 0.3% m/m to AED 1.18tn (USD 321.3bn) in July 2013, compared with a 1.6% growth the previous month mainly on lower bank deposits and falling M1, state news agency WAM reported on Sept 10 citing a statement from the central bank. The latter has not published an official breakdown yet.
Money supply aggregate M1 (currency in circulation plus monetary deposits) dropped 0.6% m/m to AED 344.7bn in July, following a 1.6% growth the month before. The reading was dragged down by a 0.2% drop in total bank deposits to AED 1.253tn. Resident deposits fell 0.2% m/m in July and non-resident deposits dropped 0.1%.
M3 growth, an indicator of future inflation trends, is the sum of M2 plus government deposits at banks operating in the UAE as well as at the central bank. M2, which comprises of M1 and quasi-monetary deposits, edged up 0.2% m/m to AED 931.3bn, slowing from a 1.3% increase in June.
Loans and advances (net of provisions and interest in suspense) increased 1.2% m/m to AED 1.161bn on strong demand and higher bank confidence after a period of cautious stance on lending.
Total bank assets edged down 0.5% m/m to AED 1.869bn, at end-July.
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