"S&P": The UAE is issued at Dirhams at a value of $ 18 billion this year

The federal government of the UAE and the Emirate of Abu Dhabi is on his way to issue debt in Dirhams, with the aim of developing the local debt instruments and improving the curve of the dirham, according to the S&P Global Ratings. The agency said in a report that the federal government and Abu Dhabi will deliver more than $ 8 billion to local bonds during the year 2025, as part of a broader plan that includes debt issuance with a total value of approximately $ 18 billion by local UAE governments and federal government, a minor drop of $ 19 billion in 2024. debt. Among the three UAE classified by the agency, Abu Dhabi and Ras Al Khaimah, in addition to Sharjah, in 2025 is expected to cover a financial deficit of 6.3% of the emirate gross domestic product, while the other two princes are expected to maintain in their budgets. The growth of the Emirati Din market, ‘S&B’, said in its report, although the Dirha Durding Tools market is still in the early stage, especially at the level of local publications, but it is a witness to a terrible expansion. As the federal government began to collect debt in 2021, approximately 27 billion dirhams (equivalent to $ 7.3 billion) bonds and effects in the local currency, representing 42% of total publications in the same period. In July 2024, Sharjah issued long -term bonds from Dirhams, at a value of one billion dirhams, and in May it released 7 billion dirhams. On the other hand, most of the federal government’s debt and UAE are still denied by US dollars and owned by investors or institutions outside the country. The agency believes that some vague, especially Sharjah, in the light of a global economic environment characterized by uncertainty, can be exposed to the risks of high borrowing costs when excessive dependence on international financial markets. The emirate is one of the most vocabulary governments, as the net government debt reaches about 50% of GDP, while the burden of benefits forms about 30% of government revenue, which is one of the highest percentages among the Sovereign countries classified by S&B. UAE banks are ready to record the financing shocks that have Emirati banks, which have strong capital and high liquidity, can provide the necessary financing if it is not possible to obtain it from the financial markets. Over the past three years, these banks have recorded a noticeable increase in the amount of deposits, and still maintain reassuring levels between loans and deposits, supporting the expectations of strong lending growth in 2025. In the scenario of the worst cases, where the capital markets cannot be reached and banks are under pressure, “S&P” expects the federal government to support the UAE. Despite the pressure arising from low oil prices, most of the vague is likely to continue with its commitment to cautious financial policy, while maintaining strong budgets. Therefore, many emerging versions can be selective in nature and depend on the market conditions. For example, Abu Dhabi can choose to pay part of her debt, estimated at about $ 6 billion, using the result of new versions. As for Dubai, it continued its efforts to reduce debt after paying $ 1.2 billion during the first quarter of this year. The emirate is expected to turn to the issuance of new debt from 2026 to finance major infrastructure projects, especially the expansion of the Al Maktoum International Airport and the modernization of the rainwater drainage network. In Ras Al Khaimah, the government issued a $ 10 billion $ 1 billion effects in March to refinance a previous version due to the same value. Although major tourism projects are expected in the emirate, expectations indicate that most of their financing will be through government entities, which maintain potential obligations within controlled levels. “S&B” is of the opinion that the regular publications of local effects by Abu Dhabi and the federal government will contribute to the acceleration of the construction of a reference yield in the dirhams, can be used to prosecute the issues of banks and businesses, and the entry of smaller exporters in the capital, contributing to the diversification of the financing. Nevertheless, the agency expects local banks and international financial markets to remain the most important financing sources for Emirati businesses in the short term.