Mon 29-03-2021 00:39 AM
ABU DHABI, 9th December, 2020 (WAM) -- The total cumulative balance of letters of guarantee issued by banks to other business entities in the UAE significantly grew to AED248 bn by the end of January, 2021, from AED235 bn in November last year, statistics by the Central Bank of the United Arab Emirates have shown.
The significant increase in credit facilities is reflective of the continued business momentum maintained by various economic sectors in the UAE with overseas partners despite the global slowdown witnessed worldwide.
A letter of guarantee is a type of contract issued by a bank on behalf of a customer who has entered a contract to purchase goods from a supplier. It lets the supplier know that they will be paid, even if the customer of the bank defaults.
The apex bank's statistics predict business sentiments to further improve over the next months as the efforts made to resume normalcy started to bear fruit following the business lulls in the preceding period.