Govt deposits in banks in UAE and Saudi Arabia decline during Feb

Deposits held by the government and government companies in banks of the UAE and Saudi Arabia have registered a decline during February 2016, according to the data furnished by the central banks of the respective countries.

According to the UAE Central Bank, the deposits of the government and the government companies in February declined 15% year-on-year to AED 158 billion. Meanwhile, in Saudi Arabia the total government deposits for the month under review fell by 6.6% to SAR 271.8 billion from SAR 291 billion in January 2016.

This trend has been attributed to the adverse impact of low prices of crude oil in the international market, which has compelled the governments of these countries to withdraw funds from the banking sector with the aim of financing their growing fiscal deficits.