Sharjah Government initiates AED4 billion liquidity support to counter economic impact of COVID-19

SHARJAH, The Sharjah Finance Department, SFD, recently established a framework worth AED4 billion to enhance liquidity for the banking system in the emirate. The move aims to provide additional financial assistance to all businesses impacted by the outbreak of COVID-19.

“Issued as 12 month dirham-denominated paper in several tranches, the Sharjah Liquidity Support Mechanism, SLSM, Sukuk represents the first rated short term local currency tradeable instrument in the UAE, which can be used for liquidity management by banks,” SDF said in a statement on Tuesday.

“This paper has a short term investment grade rating of A-2 by Standard & Poor’s rating agency,” it added.

Waleed Al Sayegh, Director-General of Sharjah Finance Department said, “The authorities in Sharjah and across the region are taking the required measures to provide maximum assistance to all businesses dealing with the impact of the outbreak. This service will allow banks to use the Sukuk as security to access liquidity facilities at the UAE Central Bank, by following the required guidelines.”

He further added that since the beginning of the crisis, Sharjah Government has introduced several packages and services to support companies and individuals.

A first tranche of the SLSM was subscribed to in May by Bank of Sharjah with an AED 2 billion participation. Subsequent tranches with one or more other banks are expected to expand the SLSM to AED 4 billion, the statement added.

 

Source: Emirates News Agency