The Central Bank of the UAE (CBUAE) has extended access to the $13 billion (Dh50 billion) zero-cost liquidity facility under its Targeted Economic Support Scheme (TESS) until the end of June 2022, in order to help mitigate the effect of the COVID-19 pandemic on the economy.
According to the CBUAE statement, the extension of one of TESS’s key components would enable financial institutions to use the collateralized facility to provide new loans and funding to individuals, small and medium-sized businesses, and other private sector entities affected by the pandemic.
TESS is a comprehensive initiative that was launched in March of last year to assist businesses and residents in overcoming the economic difficulties posed by the outbreak. The program was earlier extended to June 30, 2021.
The bank’s loan deferral financing under the TESS scheme will be extended until the end of the year. “The CBUAE expects financial institutions to prioritize lending through the TESS to the most negatively affected sectors, businesses, and households, contributing to a balanced revival of the UAE’s diversified economy,” the authority said.
“The extension of Tess shall allow continued support by the financial system to sectors negatively affected by the COVID-19 pandemic. This is done to support the recovery phase, in line with the CBUAE mandate to ensure financial and monetary stability,” commented Mr. Khaled Al Tameemi, Governor of the CBUAE.
As per the statement, over 320,000 bank customers, including individuals, small and medium-sized enterprises (SMEs), and other private companies, have benefited from the facility as of March 2021.
According to the International Monetary Fund (IMF), the UAE’s economy shrank by 5.9 percent last year as restrictions to control the novel coronavirus harmed critical sectors such as tourism and aviation. Furthermore, the IMF has estimated that real gross domestic product (GDP) is expected to grow 3.1 percent this year.