16 Mar 2020; MEMO: The central banks of the United Arab Emirates (UAE) and Saudi Arabia, the two largest Arab economies, on Saturday announced stimulus plans worth a combined $40 billion to ease the impact of the coronavirus outbreak in their respective countries, Reuters reports.
The UAE regulator plans to support banks and businesses in the country, where the outbreak is affecting major economic sectors such as tourism and transport, with a 100 billion dirham ($27 billion) economic plan, it said on Saturday.
In a separate statement, the Saudi Arabian Monetary Authority said it had prepared a 50 billion riyal ($13.32 billion) package to help small and medium-sized enterprises (SMEs) cope with the economic impacts of coronavirus.
The disease has so far infected 85 people in the UAE and 105 in Saudi Arabia.
The Saudi funding aims to grant SMEs six-month deferrals on bank payments, concessional financing and exemptions from the costs of a loan guarantee programme, SAMA said.
Concerts, sporting events and industry conferences have been cancelled or postponed in the past few weeks in the UAE to contain the spreading of the new coronavirus.
In Dubai, the Middle East’s trade, finance, tourism and transportation hub, some businesses have started to feel the pain from the global travel slowdown caused by the outbreak.
Saudi Arabia, which has already suspended the Umrah pilgrimage and locked down its eastern Qatif region where many infections are located, plans to halt all international flights for two weeks from Sunday.
The UAE central bank said it will provide 50 billion dirhams through collateralised loans at zero cost to all banks operating in the UAE while an additional 50 billion dirhams will be freed up from lenders’ capital buffers.
“The CBUAE is allowing banks to free-up their regulatory capital buffers to boost lending capacity and support the UAE economy,” it said in a statement.
It said the scheme offers banks relief for up to six months from the payments of principal and interest on outstanding loans for affected private sector companies and retail customers.
