The UAE’s net foreign currency reserves jumped 19% or by around AED 62.24 billion ($16.94 billion) in the first 10 months of 2018 to AED 390.54 billion from AED 328.3 billion by the end of December 2017, according to data released by the Central Bank of the UAE.
Commenting on this surge, economist Ali Al-Hammoudi told Mubasher that the rise would encourage the flow of foreign investments, noting that such high reserves help in absorbing financial crises, should they arise.
Of these foreign currency reserves, AED 324.82 billion are held by the central bank, while the remaining AED 65.72 billion are held with banks operating in the country.
When a central bank holds a large amount of foreign currency reserves, this bolsters confidence in financial policies and exchange rates, the analyst noted.
Month-on-month, foreign currency reserves fell 2.8% or by AED 11.29 billion from AED 401.83 billion by the end of September, the data showed.