The central bank of the United Arab Emirates said today it would supply liquidity to locally operating financial institutions, to help cushion the blow of a recent Dubai World request to delay payments on its debt, according to dpa. The central Bank of the UAE "stands behind UAE banks and branches of foreign banks operating in the UAE," read the statement. It "has issued a notice to UAE and banks and branches of foreign banks operating in the UAE, making available to them a special additional liquidity facility." The central bank said the country"s financial system was stable, had sufficient liquidity, and was in better shape than at the same time last year. Dubai World"s announcement Wednesday move spread fear that banks in the region would take heavy losses and see assets withdrawn in a panic. The central bank"s decision came before markets opened on Monday, with Gulf exchanges having been shut for the Eid al Adha holiday since the crisis began last week.
