The United Arab Emirates' finance ministry will make available AED25 billion ($6.81 billion) to banks next week as the second part of a support package, the official news agency WAM said on Thursday. UAE banks have borrowed 80 percent of the first AED25 billion liquidity package allocated last month, a newspaper reported on Wednesday citing an official from a committee in charge of managing the impact of the global credit crisis. The UAE government said last month it would inject AED70 billion into the banking system and made the first tranche deposit in late October. The move is aimed at easing tight lending conditions amid the global financial crisis and mirrors a similar move by Saudi Arabia. In a similar move to encourage banks to lend to each other, Saudi Arabia's central bank last month week made riyal- and dollar-denominated deposits worth up to $3 billion with banks struggling to cope with the global turmoil. Banks across the region have struggled to finance these projects as credit conditions have tightened globally, prompting governments to take a series of steps in the past month to address the credit crunch. Regional governments and central banks, who were previously focused on battling record-high inflation, have guaranteed bank deposits, eased lending restrictions, slashed interest rates, set up emergency funds, and invested in ailing stock markets.
