UAE Issues $400 Million Domestic Treasury Bonds in Dirhams

The UAE Ministry of Finance is working to build a local bond market and provide safe investment alternatives for local and foreign investors (WAM)
The UAE Ministry of Finance is working to build a local bond market and provide safe investment alternatives for local and foreign investors (WAM)
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UAE Issues $400 Million Domestic Treasury Bonds in Dirhams

The UAE Ministry of Finance is working to build a local bond market and provide safe investment alternatives for local and foreign investors (WAM)
The UAE Ministry of Finance is working to build a local bond market and provide safe investment alternatives for local and foreign investors (WAM)

The UAE has announced the launch of conventional AED denominated Treasury Bonds of the Government of the UAE (T-Bonds), with benchmark auction size of AED1.5 billion ($400 million).

This was conducted through the Ministry of Finance (MoF) as the Issuer, in collaboration with the Central Bank of the UAE (CBUAE) as the issuing and paying agent.

Subject to market conditions, the first auction date to be held in May 2022 is expected to be announced soon, followed by a series of periodical auctions as published in the Issuance Calendar for 2022 on the MoF website.

The conventional T-Bonds will be denominated in UAE dirhams to develop the local bonds debt market, and ultimately, the aim is to help develop the mid-term yield curve.

The securities will be issued initially in 2/3/5 year tenures; followed by a 10-year bond later.

These securities will be auctioned and traded through Bloomberg’s Auction System and settled through a local platform, compliant with international standards, built and operated by Euroclear Bank.

The Ministry has published a robust Primary Dealers code, and on boarded six banks, namely ADCB, Emirates NBD, FAB, HSBC, Mashreq and Standard Chartered, as Primary Dealers to participate in the T-Bonds primary market auction and to actively develop the secondary market.

Commenting on the announcement of T-Bonds issuance, Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs, said "Issuing the T-Bonds in local currency will contribute to building a local currency bond market, diversifying financing resources, boosting the local financial and banking sector, as well as providing safe investment alternatives for local and foreign investors.”

“This issuance will also help build the UAE Dirham-denominated yield curve, thereby strengthening the local financial market and developing the investment environment," he added.

Al Hussaini added that the issuance provides pricing reference for other UAE markets (bond and equity), enhances the ability to cover future funding needs in UAE dirham, and provides opportunities for foreign investors to invest in UAE dirham-denominated bonds (in local currency).

Khaled Mohamed Balama, Governor of the CBUAE, said, "The launch of the T-Bonds program represents another milestone towards the development of a Dirham local market for securities issued by the public sector in the UAE and follows the launch of the Monetary Bills program earlier last year.

With the robust financial market infrastructure developed for the purpose, we are confident that the launch of such a program will enable market participants in the UAE to maintain a transparent, single, diversified, and sustainable pool of Dirham liquidity.”



Pakistan Set to Receive $20 Billion Loan From World Bank

FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
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Pakistan Set to Receive $20 Billion Loan From World Bank

FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro
FILE PHOTO-People wait for their turn to buy low-priced bun-kabab from a shop in Karachi, Pakistan June 10, 2022. REUTERS/Akhtar Soomro

Pakistan is set to receive a loan of $20 billion from the World Bank over the next 10 years, aimed at improving the country’s key sectors, sources told Geo News on Saturday.

According to sources in the Ministry of Economic Affairs, the loan will be part of the World Bank's support under the Country Partnership Framework 2025-35, which focuses on sustainable economic development.

The loan is expected to be approved by the WB's Board of Directors on January 14. Once approved, Martin Raiser, the lender's Vice President, is expected to visit Islamabad to discuss the loan program and its implementation.

In addition to the $20 billion, two subsidiary entities of the World Bank will assist Pakistan in securing another $20 billion in private loans.

This would bring the total financial package to $40 billion, which will be allocated towards infrastructure development, climate resilience projects, and improving social services.

Meanwhile, The News newspaper reported that the government, in its bid to achieve an economic revival, has launched the National Economic Transformation Plan which aims to achieve ambitious economic targets, including doubling GDP growth and halving poverty over a five-year period.

The plan envisages attracting $29 billion anticipated investment under the supervision of the Special Investment Facilitation Council (SIFC) including $10 billion from the UAE, $5 billion from Saudi Arabia, $2 billion from Qatar, $2 billion from Azerbaijan, and $10 billion from Kuwait.

Meanwhile, the gross domestic product (GDP) target has been set at 6% of the GDP till the Fiscal Year 2028-29 whereas the per capita income in dollar terms is projected to go up to $2,405 from $1,680.