The United Arab Emirates has pledged to stand behind foreign and domestic banks in the country, offering additional money while extolling the strength of the Gulf nation’s financial sector as world markets brace for a potential day of reckoning Monday over Dubai’s crushing debt.
The UAE’s immediate priority was arguably to avert any run, however unlikely, on banks by panicked depositors. But the promise of cheap funds also signaled to global investors that the country’s federal government — backed by oil money — will do what it can to limit the fallout from its indebted emirate’s woes.
In a statement Sunday, the UAE’s central bank said it had sent notice to Emirati banks and foreign banks with branches in the country making clear they would have access to “a special additional liquidity facility.”
