The UAE central bank launches a recovery plan to respond to the impact of the war: multiple liquidity facilities are launched simultaneously to support the credit capacity of the banking industry.

Due to the ripple effects of the Iran war affecting the regional market and dampening investor confidence, the Central Bank of the United Arab Emirates has introduced a comprehensive recovery plan to support the banking sector and enhance liquidity and lending capabilities. In a statement released on Tuesday, the central bank stated that these measures allow lending institutions to utilize up to 30% of cash reserves and access term liquidity facilities in Dirhams and US Dollars. These measures also provide temporary relief for liquidity and stable fund ratios, including the release of key capital buffers to support economic development. According to the central bank, banks can also postpone classifying loans of borrowers affected by "special circumstances" as non-performing loans. As the US-Iran war enters its 19th day, the UAE has been at the forefront of retaliation from Iran. Energy infrastructure, airports, residential and commercial buildings have been damaged by intercepted missiles and fragments. However, most areas of the country remain open, with shops and restaurants operating normally and many offices shifting to remote work. Previously, it was revealed by a shipping agent and an insider that the UAE's main port of Fujairah had suspended oil loading, the latest shutdown on the country's only oil export route outside the Strait of Hormuz following a series of war-related attacks. Oil revenue remains a crucial driver of UAE economic growth. Analysis indicates that regional conflicts, even in relatively moderate conditions, put pressure on economic activities, and banks in the UAE and Qatar may see profits in 2026 lower by 5% to 15% compared to general expectations. Industry research shows that lending institutions in the UAE face greater resistance than their regional counterparts, reflecting the country's reliance on the tourism industry and the mobility of expatriates, as well as possible adjustments in the real estate market. Nevertheless, the UAE Central Bank emphasized the strength of the financial system, noting foreign reserves exceeding 1 trillion Dirhams (270 billion US dollars). The central bank stated that available liquidity is approximately 920 billion Dirhams, including reserves held by the central bank and eligible assets for its operations, with reserve balances alone exceeding 400 billion Dirhams. Since the outbreak of the war, the Dubai benchmark stock index has fallen by 13%, while the Abu Dhabi benchmark stock index has dropped by 7%. Over the past two days, driven by real estate and banking stocks, both stock markets have seen some recovery.