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The UAE central bank has rolled out emergency measures to support banks, temporarily loosening liquidity rules and expanding access to funding as Iranian strikesThe UAE central bank has rolled out emergency measures to support banks, temporarily loosening liquidity rules and expanding access to funding as Iranian strikes

UAE central bank unveils package to support lenders amid Iran war

Author: Agbi
Source: Agbi
2026/03/18 15:16
3 min read
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  • Temporarily loosens liquidity rules
  • Expands access to funding
  • Says no material impact on banks’ health

The UAE central bank has rolled out emergency measures to support banks, temporarily loosening liquidity rules and expanding access to funding as Iranian strikes on critical infrastructure raise the risk of tighter financial conditions.

The financial resilience package aims to reinforce the stability of the UAE banking sector, ensuring lenders maintain access to dirham and US dollar liquidity, as the system – with assets of around AED5.4 trillion ($1.5 trillion) – navigates the US-Israel-Iran conflict, state-run Wam news agency reported.

The measures are backed by the central bank’s foreign-exchange reserves of more than AED1 trillion.

There has been no material impact on the banking sector’s health and payment systems, the board of the central bank said.

UAE banks hold nearly AED920 billion with the central bank, including more than AED400 billion in reserves. Foreign reserves exceed the monetary base, with a 119 percent cover ratio, giving the monetary authority strong capacity to support the system.

The central bank is adopting a five-pronged approach that allows banks to use up to 30 percent of their required reserves and expands access to longer-term funding in dirhams and US dollars.

It will further offer temporary relief on liquidity and stable funding ratios and a provisional release of capital buffers to support the local economy.

The central bank will allow banks to postpone classification of individual and corporate loans amid the regional conflict, specifically those affected by “extraordinary circumstances”.

Finally, the central bank said lenders “should continue to provide the required financing services to support their customers and the national economy”.

Sheikh Mansour bin Zayed Al Nahyan, chairman of the central bank, said its “precautionary policies and proactive frameworks have consistently demonstrated their effectiveness in promoting the resilience and preparedness of the financial and banking sector, while ensuring monetary and financial stability”.

Sheikh Mansour is also UAE vice president and deputy prime minister.

Earlier, S&P Global Ratings said Gulf banks could call upon $630 billion in cash, liquid investments and central-bank deposits if a prolonged war with Iran sparks widespread customer withdrawals.

The credit ratings agency estimates that bank customers could withdraw up to $307 billion of cash deposits if the most intense stage of the conflict lasts up to four weeks.

“During previous shocks, such as Covid-19, regulators intervened with forbearance measures, enabling banking systems to absorb potential loan impairments over time,” S&P said.

“We anticipate regulators would take similar action should a comparable shock occur,” the ratings agency added.

Further reading:

  • S&P warns on Gulf bank deposits ‘if war persists’
  • Frank Kane: Oil is still flowing through Hormuz – on Iran’s terms
  • Dubai stocks tumble after Iran hits airport
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