CBUAE to Launch New Index for Actual Overnight Funding Transactions

The Central Bank of the UAE (CBUAE). Wam
The Central Bank of the UAE (CBUAE). Wam
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CBUAE to Launch New Index for Actual Overnight Funding Transactions

The Central Bank of the UAE (CBUAE). Wam
The Central Bank of the UAE (CBUAE). Wam

The Central Bank of the UAE (CBUAE) will publish a new index for actual overnight funding transactions denominated in UAE Dirham from December 7, 2021, named "DONIA" – Dirham Overnight Index Average, as part of the new Dirham Monetary Framework implementation plan.

The objective of this new index is to provide market participants with data pertinent to the overall state of the actual interbank market and to improve transparency in domestic money market activities.

Governor of the CBUAE Khaled Mohamed Balama said the launch of DONIA facilitates implementation of the new Dirham Monetary Framework.

We, at the CBUAE, are confident that the publication of this new reference rate will not only provide additional transparency to the Dirham money markets but also help the CBUAE in ensuring overnight money market rates are aligned to prevailing Base Rate."

DONIA is the effective overnight reference rate for the Dirham. It is computed as a volume-weighted money market rate for all actual overnight secured and unsecured funding transactions of AED10 million or greater contracted by all banks operating in the UAE, captured through the UAE Funds Transfer System (UAEFTS).

The CBUAE expects that this index will serve as an anchor for banks in determining factors relevant to their daily fixing of interbank rates (EIBOR).

DONIA should also help improve monetary policy transmission in the UAE, underpinned by the transparency in terms of the way it is computed, and the fact that it is a true reflection of actual local interbank market conditions.

The CBUAE has no plans to discontinue the EIBOR once the DONIA is published, as DONIA and EIBOR will co-exist in the domestic markets.

At this stage, DONIA shall not be used to price financial market products offered or structured in the UAE.



Saudi Ministers Highlight Resilience, Adaptability of the Kingdom’s Economy at Budget Forum

Finance Minister Mohamed Al-Jadaan speaks in the first dialogue session of the 2025 Budget Forum. (Asharq Al-Awsat)
Finance Minister Mohamed Al-Jadaan speaks in the first dialogue session of the 2025 Budget Forum. (Asharq Al-Awsat)
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Saudi Ministers Highlight Resilience, Adaptability of the Kingdom’s Economy at Budget Forum

Finance Minister Mohamed Al-Jadaan speaks in the first dialogue session of the 2025 Budget Forum. (Asharq Al-Awsat)
Finance Minister Mohamed Al-Jadaan speaks in the first dialogue session of the 2025 Budget Forum. (Asharq Al-Awsat)

Saudi ministers reaffirmed the continued success of Vision 2030 and the economy’s ability to overcome challenges while achieving diversification.

Speaking at the 2025 Budget Forum, organized by the Ministry of Finance, they underscored the importance of fiscal policies in driving sustainable economic growth and emphasized the integration of various sectors to enhance Saudi Arabia’s global standing.

The forum followed the Cabinet’s approval of the 2025 budget, which projects revenues of SAR 1.184 trillion ($315.7 billion), expenditures of SAR 1.285 trillion ($342.6 billion), and a deficit of SAR 101 billion ($26.9 billion).

Sustainable Spending and Economic Diversification

Finance Minister Mohammed Al-Jadaan highlighted that sustainable spending has enabled Saudi Arabia to provide high-quality services. He emphasized that fiscal policies focus on sectors with a direct impact on economic development and diversification.

Al-Jadaan noted that ensuring fiscal sustainability is crucial to reducing reliance on oil revenues.

“Structural reforms under Vision 2030 have transformed the economy,” he said, adding that non-oil revenues have reached SAR 472 billion due to the significant progress in diversification efforts.

He further explained: “Previously, Saudi Arabia’s growth depended heavily on oil revenues. Today, through diversified economic resources and sustainable fiscal policies, our economy is more resilient.”

He also stressed the role of government borrowing in balancing revenues and expenditures, benefiting both public and private sectors.

Progress Toward Economic Diversification

Minister of Economy and Planning Faisal Al-Ibrahim highlighted that one of Vision 2030’s key objectives is to unlock the potential of citizens while reducing reliance on oil. He noted that in its eighth year, the vision continues to advance steadily and with strong momentum, addressing previous challenges such as dependence on government spending and oil revenues.

“Non-oil activities have grown by 6% over the last three years,” Al-Ibrahim said, “now contributing 52% of real GDP.” He added that non-oil sector growth is projected to reach 3.9% by year-end and 4.8% in 2024.

Al-Ibrahim stressed the importance of sustainable, high-quality growth driven by private sector dynamism and productivity. He also highlighted Saudi Arabia’s increasing global competitiveness in sectors like healthcare, citing breakthroughs such as robotic heart surgeries.

Additionally, he noted the Kingdom’s demographic advantage, stating: “We have a young population, and now is the time to invest in their capabilities, as envisioned under Vision 2030.”

Employment and Reducing Unemployment

Minister of Human Resources and Social Development Ahmed Al-Rajhi announced a new unemployment target of 5% for Saudis by 2030. This follows the Kingdom’s early achievement of its previous unemployment target of 7%, reached seven years ahead of schedule.

Industrial Growth and Export Expansion

For his part, Minister of Industry and Mineral Resources Bandar Al-Khorayef reported significant progress in the industrial sector, with 1,100 new industrial licenses expected in 2024 and 900 factories entering production.

Non-oil exports grew by 15% in 2024, rising from SAR 458 billion ($121.9 billion) to SAR 528 billion ($140.5 billion). Al-Khorayef highlighted that the Saudi Industrial Development Fund financed projects worth SAR 12 billion ($3.2 billion) this year, contributing to total investments exceeding SAR 60 billion ($16 billion).

“The industrial sector is now a central part of government agendas,” he said, adding that export growth was driven by new product development.

Digital Transformation and a Cashless Economy

Minister of Communications and Information Technology Abdullah Al-Swaha outlined Saudi Arabia’s strategy to become a technology exporter, which is a key part of its digital economy goals. He highlighted that over 70% of transactions in the Kingdom are now cashless, supported by the emergence of more than 200 fintech companies.

Al-Swaha emphasized that the next phase will focus on exporting technology and establishing Saudi Arabia as a global leader in the tech sector.

Transportation Growth

Minister of Transport and Logistics Services Saleh Al-Jasser reported that the sector created 122,000 jobs in Q3 2024, with women comprising 29% of the workforce.

He also noted that the transport sector aims to achieve 60% local content in its spending by 2030. The current figure stands at 50%, up from 39% in the baseline year.

Education, Tourism, and Sports

Minister of Education Yousef Al-Benyan highlighted the establishment of the National Center for Curriculum Development as a major achievement in 2023. He also noted that education spending in the 2025 budget exceeds SAR 200 billion.

Minister of Tourism Ahmed Al-Khatib reported that the tourism sector now contributes 5% to GDP, up from previous years, with a goal of reaching 10% by 2030. He added that Saudi Arabia surpassed its Vision 2030 target of 100 million visitors, reaching 109 million tourists in 2023.

In the sports sector, Prince Abdulaziz bin Turki Al-Faisal, Minister of Sports, revealed that 25 local and international companies have shown interest in investing in privatized sports clubs, with projected revenues of SAR 500 million ($133 million).