UAE central bank reassures markets as Iranian strikes rattle region
The Central Bank of the United Arab Emirates sought to reassure investors as tensions escalated in the Gulf, with Governor Khaled Mohamed Balama stating that the country’s financial system remains resilient despite Iranian missile and drone strikes.
In an official statement, Balama said the UAE’s banking and financial sector is “resilient, strong, stable and well prepared” to manage the economic impact of the ongoing regional conflict.
He noted that the UAE’s capital adequacy ratio stands at about 17 percent, while its liquidity coverage ratio exceeds 146.6 percent, both significantly higher than international regulatory benchmarks.
Total assets in the UAE banking sector now exceed 5.42 trillion dirhams, equivalent to roughly $1.48 trillion, according to the central bank.
Balama said banks, financial institutions and insurance companies across the country continue to operate normally and provide services without disruption. He added that institutions rely on advanced risk management systems and business continuity frameworks aligned with international standards.
The central bank also conducts regular stress tests and maintains close coordination with relevant authorities to ensure the continuity of financial services during periods of instability.
The reassurances came as financial markets in the UAE resumed trading after a temporary shutdown. The Abu Dhabi Securities Exchange and the Dubai Financial Market reopened on Wednesday following a two day suspension ordered by the country’s Securities and Commodities Authority to prevent disorderly trading.
The Dubai exchange introduced a temporary daily decline limit of 5 percent to manage market volatility. Stocks fell during early trading on Thursday.
The financial turbulence follows Iranian retaliatory strikes against the United Arab Emirates that began on February 28 after coordinated US and Israeli attacks against Iran.
According to the UAE Ministry of Defense, the country intercepted 175 of 189 ballistic missiles and 876 of 941 drones launched toward its territory by March 4.
Three foreign nationals from Pakistan, Nepal and Bangladesh were killed and dozens of others injured, mostly by debris from missile interceptions.
Drone and missile strikes damaged several civilian sites in Dubai and Abu Dhabi, including areas around the Burj Al Arab, airport facilities and luxury hotels on Palm Jumeirah.
The attacks have raised concerns among investors about the UAE’s reputation as a safe investment hub and have sparked questions about the outlook for the country’s real estate sector and foreign investment flows.
The conflict is also complicating the economic outlook. Rising oil prices have renewed inflation concerns, leading analysts to warn that expected interest rate cuts could be delayed.
Because the UAE dirham is pegged to the US dollar, the country’s central bank generally follows monetary policy decisions by the US Federal Reserve. Prolonged high interest rates in the United States would therefore keep borrowing costs elevated for households and businesses in the UAE.
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