The UAE Central Bank recorded a mixed monetary picture in March 2026, with broad money supply and gross credit climbing to new highs even as narrow money and the monetary base contracted.
The money supply aggregate M1 declined 2.5% to AED1,072.7 billion, pulled down by a 4.0% drop in monetary deposits. Currency in circulation outside banks, however, moved in the opposite direction, rising 6.9% during the same period.
Broader monetary measures told a different story. M2 edged up 0.4% to AED2,869.3 billion, supported by a AED39.6 billion rise in quasi-monetary deposits. Government Related Entities (GREs) were the standout contributor, with deposits surging 16.3%. That gain was partially offset by declines in corporate deposits (1.7%), individual deposits (2.8%) and Other Financial Corporations (1.3%). M3 posted the strongest growth at 1.6%, reaching AED3,406.8 billion, as government sector deposits climbed 8.2% to AED537.5 billion.
The monetary base contracted 4.3% to AED879.5 billion, largely due to a sharp 21.9% fall in reserve requirements and a 4.6% decline in monetary bills and Islamic certificates of deposit. The drop was cushioned by a 32.7% jump in bank current accounts and overnight deposits, along with an 8.9% rise in currency issued.
On the credit side, gross bank credit grew 2.5% to AED2,695.6 billion, underpinned by a AED52.4 billion increase in domestic credit. Government sector lending led the charge at 6.9%, followed by GRE credit at 6.0% and private sector credit at 1.1%.
Gross bank assets rose 1.5% to AED5,556.5 billion, while total bank deposits increased 1.4% to AED3,446.0 billion, reflecting continued confidence in the UAE's banking system.
News Source: Emirates News Agency
