Mansour bin Zayed: The CBE's proactive response has contributed to supporting economic stability

H.H. Sheikh Mansour bin Zayed Al Nahyan, Vice President of the UAE, Deputy Prime Minister, Minister of the Presidential Court and Chairman of the Board of Directors of the Central Bank of the UAE, stressed the Central Bank's continuous efforts to maintain monetary and financial stability, supervise and supervise financial institutions, ensure the operation and qualitative use of the cash and electronic payment infrastructure, and increase the focus on anti-money laundering, combating the financing of terrorism and protecting consumers in the financial services sector.
In his speech at the UAE Central Bank's 2022 annual report, His Highness said: "In 2022, the UAE was able to overcome the obstacles that emerged as a result of the Covid-19 pandemic, and vaccination campaigns that boosted immunity spread widely. With the return of global trade activities, most developed and developing countries have seen a marked increase in inflation, reaching levels that far exceeded inflation targets set in most advanced economies. At the macroeconomic level, inflation drivers have emerged after the easing of COVID-19 lockdowns, including a strong recovery in aggregate consumer and trade demand, disruptions to global supply chains and difficult market conditions."
"These drivers have increased significantly as a result of rising geopolitical tensions in some regions of the world, which has also directly contributed to the historic rise in the prices of oil, gas and other commodities. "We concluded in our latest assessment that the risk of a recession in the global economy remains in the near term, while uncertainty about the medium-term outlook persists."
"Against the backdrop of global uncertainties and geopolitical tensions that could threaten the macroeconomy, the Central Bank continued to implement a strong and flexible policy as part of its macroprudential and monetary policy and its future supervisory functions. In setting its policy, the Central Bank took into account the UAE government's strategic roadmap to maintain the country's competitiveness, ensure high economic growth, and achieve full employment for its nationals."
His Highness added: "In this regard, we find that the strong policy framework adopted by the Central Bank has provided the necessary basis to achieve the targeted economic results for the country, and in light of which it was able to record a GDP growth of 7.6% in 2022."
His Highness said that despite the prevailing conditions and high inflation rates in general, the UAE witnessed a rate much lower than the global average inflation of 8.8%, due in part to the Central Bank's decision to align with the Federal Reserve System's strategy, and raise the interest rate to 4.4%, as well as the rise in the exchange rate of the dirham.
His Highness explained that the country's credit rating remained high at "Aa2" and "AA-" by Moody's and Fitch respectively, while the level of public debt was low at 40% of GDP and credit continued at a steady pace to the corporate and individual sectors at a rate that supports economic growth.
"As the UAE's overall prudential authority, the Central Bank has ended most of the temporary support measures aimed at helping the country cope with the repercussions of the COVID-19 pandemic, as this decision reflected the return of the banking system to pre-pandemic levels of financial strength. Over the past year, the Central Bank has demonstrated its insight in the face of unprecedented macroeconomic challenges and emerging risks, while its proactive responses have contributed to economic stability and overall economic dynamism."
"Looking ahead to us in 2023 and beyond, I believe it is essential to highlight two strategic priorities for the Central Bank, which are also at the forefront of the agendas of governments, central banks and policy-makers at the highest level.The strategic priority is for the Central Bank to embark on the implementation of the digital transformation program, which contributes to strengthening the financial infrastructure with great confidence within the Central Bank and at the state level."
"In addition, the Central Bank will contribute to large-scale UAE policy initiatives as part of its hosting of COP28. It will also continue to take steps to ensure climate risk is taken into account and facilitate sustainable finance in the financial sector regulatory framework, and will adopt aspects of ESG principles in its medium-term investment policy and operations."
His Highness concluded: "As for the Board of Directors of the Central Bank, I would like to take this opportunity to express my sincere gratitude to our senior management, employees, all our partners and other relevant parties for their support and commitment to our vision of supporting the Central Bank's directions to be the best among its peers. We have made clear progress towards this ambitious goal in 2022 and I am confident that the Central Bank will continue to strive for excellence, ensure a resilient financial system and contribute to the continued prosperity of the UAE."