The rate at which leading banks in the UAE borrow from each other has fallen by nearly 10 per cent since the start of this month.
It is the sharpest fall so far this year, reflecting more robust levels of liquidity in the financial system.
The dip in the Emirates interbank offered rate (Eibor) comes as controversy surrounds its equivalent rate in London, the Libor.
"There's more liquidity coming in [to the UAE financial system] from Europe and higher crude prices," said Sanyalaksna Manibhandu, a banking analyst at National Bank of Abu Dhabi.
"If people don't trust other benchmark rates they will look elsewhere and the Middle East and North Africa is looking fairly attractive." The three-month benchmark rate has fallen to 1.375 per cent from 1.526 at the start of the month. The rate hardly budged during the first six months of the year.
The measure is intended to be the basis for interest on business and consumer loans, including variable-rate mortgages.
But analysts are divided on how quickly the fall will lead to a cheaper cost of borrowing or a rise in lending activity. Lending has stalled at 0.3 per cent in the UAE during the first five months of the year.
"If the cost of lending between banks comes down, there is evidence it will help corporates and businesses," said Chiradeep Ghosh, senior analyst at Securities and Investment Company in Bahrain.
But Mr Manibhandu added upcoming rules were likely to dissuade banks from enticing borrowers in the meantime. From September 30, financial institutions will be restricted in their lending to the Government and firms with government links. Other rules that take effect from January 1 require lenders to hold high-quality liquid assets equal to 10 per cent of their liabilities.
Eibor shares similarities to Libor in the way it is composed. It is set by a panel of 12 local and international banks that quote indicative interbank lending rates in UAE dirhams for tenors from one week to one year. To calculate Eibor in each tenor, the two highest and two lowest quotes are discarded before an average is taken.
The Central Bank is searching for a replacement bank to sit on the panel after Barclays asked to leave. The British bank has agreed with US and British regulators to pay US$453 million (Dh1.7 billion) in fines for attempting to manipulate Libor through its submissions to the Libor panel.
tarnold@thenational.ae
A MINECRAFT MOVIE
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The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
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Company Profile:
Name: The Protein Bakeshop
Date of start: 2013
Founders: Rashi Chowdhary and Saad Umerani
Based: Dubai
Size, number of employees: 12
Funding/investors: $400,000 (2018)
Three-day coronation
Royal purification
The entire coronation ceremony extends over three days from May 4-6, but Saturday is the one to watch. At the time of 10:09am the royal purification ceremony begins. Wearing a white robe, the king will enter a pavilion at the Grand Palace, where he will be doused in sacred water from five rivers and four ponds in Thailand. In the distant past water was collected from specific rivers in India, reflecting the influential blend of Hindu and Buddhist cosmology on the coronation. Hindu Brahmins and the country's most senior Buddhist monks will be present. Coronation practices can be traced back thousands of years to ancient India.
The crown
Not long after royal purification rites, the king proceeds to the Baisal Daksin Throne Hall where he receives sacred water from eight directions. Symbolically that means he has received legitimacy from all directions of the kingdom. He ascends the Bhadrapitha Throne, where in regal robes he sits under a Nine-Tiered Umbrella of State. Brahmins will hand the monarch the royal regalia, including a wooden sceptre inlaid with gold, a precious stone-encrusted sword believed to have been found in a lake in northern Cambodia, slippers, and a whisk made from yak's hair.
The Great Crown of Victory is the centrepiece. Tiered, gold and weighing 7.3 kilograms, it has a diamond from India at the top. Vajiralongkorn will personally place the crown on his own head and then issues his first royal command.
The audience
On Saturday afternoon, the newly-crowned king is set to grant a "grand audience" to members of the royal family, the privy council, the cabinet and senior officials. Two hours later the king will visit the Temple of the Emerald Buddha, the most sacred space in Thailand, which on normal days is thronged with tourists. He then symbolically moves into the Royal Residence.
The procession
The main element of Sunday's ceremonies, streets across Bangkok's historic heart have been blocked off in preparation for this moment. The king will sit on a royal palanquin carried by soldiers dressed in colourful traditional garb. A 21-gun salute will start the procession. Some 200,000 people are expected to line the seven-kilometre route around the city.
Meet the people
On the last day of the ceremony Rama X will appear on the balcony of Suddhaisavarya Prasad Hall in the Grand Palace at 4:30pm "to receive the good wishes of the people". An hour later, diplomats will be given an audience at the Grand Palace. This is the only time during the ceremony that representatives of foreign governments will greet the king.
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In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda