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Central Bank sees faster 2019 growth, no real impact from Iran sanctions

The UAE central bank expects economic growth to accelerate to 4.2% in 2019, with no material impact from the renewal of US sanctions on Iran as long as banks have prepared for the penalties, its Governor Mubarak Rashed al-Mansoori said on Tuesday. The central bank said in September it expected real GDP growth of 2.3 % in 2018, but Mansoori said on Tuesday that the bank hoped to close the year at 2.8% growth. He later told reporters that growth forecasts for next year were mainly driven by oil, but there would be strong contributions from the non-oil sector as well. On Iran’s sanctions, Mansouri said that “actually, we don’t expect material impact provided that when the previous sanctions were on, banks have taken measures and when they lifted sanctions, banks did not go back as normal due to having to keep their relations with clearing banks in the US.” The two Iranian banks operating in the UAE will continue to operate because they have minimal operations only dealing with Iranians living in the country, said Mansoori. Mansoori also said with the federal debt law of the UAE now passed, the central bank will issue debt, bonds and sukuk. “We will only issue as an agent for the government, if the government wants to issue debt.” He said the debt issuance will help build a yield curve that is going to set the stage for banks as well as other borrowers to tap capital markets. 

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