Last year a public draft debt law has been passed by The Federal National Council (FNC) in the UAE which predetermined that the total value of the entire country’s public debt should not exceed Dh300 billion or 45 percent of the GDP, whichever amount is less. Obaid Humaid Al Tayer, the Minister of State for Financial Affairs said that after this law on public debt is issued in the UAE, the emirate of Abu Dhabi is expected to set up a new debt management office. He said that firstly the law on public debt needs to be issued.
This move of debt management is especially designed in order to help the country in managing and better monitoring of its debts. The law says that the local public debt should not exceed 15 percent of the GDP. The public debt office will be established in the Ministry of Finance. If we talk about monitoring the debt exposure across the emirate and at the Federal level, for that the proficient authorities in each emirate would also set up their own public debt offices.
The Director-general in the Ministry of Finance, Younis Al Khoury said, there are no immediate plans to sell off federal bonds. He further said: “Preliminary predictions show the government does not need to borrow.”
Sultan Nasser Al Suwaidi, the UAE Central Bank Governor said that according to the World’s discussions with the lenders on the issues of restructuring of the debts were on course. The countries under this attack from speculators will be supported by the government of the 16 euro nations. They all will lend 750 billion euros to those countries. Various new initiatives are being taken to tackle the problem of this rising amount of bounced cheques. This number and the value of bad loans have drastically increased because of the downturn of the global economy and companies cut jobs.
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