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UAE appoints new cbank governor

ABU DHABI, September 22, 2014

The United Arab Emirates' president has appointed Mubarak Rashid Al Mansouri as the new central bank governor for a four-year term, the state news agency Wam said, citing a presidential decree.

Al Mansouri, the chief executive of Emirates Investment Authority, a federal investment fund, replaces Sultan Nasser Al Suweidi, who has been at the helm of the institution since 1991.

The UAE's monetary policy is closely linked to that of the US Federal Reserve due to a long-standing dirham currency peg to the dollar. 

Al Mansouri's appointment came as a surprise, as all the other current board members were confirmed in their posts, said a Reuters report.

The change comes less than two years after top Abu Dhabi banker Khalifa Mohammed Al Kindi became the new central bank chairman in November 2012.

A senior Abu Dhabi banker described Al Mansouri, in his mid-40s, as forward thinking, reserved by nature and close to  Sheikh Mansour bin Zayed Al Nahyan, UAE Deputy Prime Minister, who is also the chairman of the EIA.

"Having a young governor with experience in the financial area would be beneficial as modernisation sweeps across the UAE's banking sector," said the banker, who declined to be named due to sensitivity of the matter.

"Suweidi has been governor for over two decades and infusing young blood to lead the central bank is a welcome change. Mansouri hopefully should bring more dynamism and changes in the UAE's banking sector," he said without elaborating.

Al Mansouri, who served as a central bank board member in the past, also sits on the board of the stock market regulator, the Securities and Commodities Authority, as well as telecom operator Etisalat, Abu Dhabi Securities Exchange and some other Abu Dhabi entities.

"He definitely has a good knowledge and experience of the central bank's functionality, as he was a board member for some years," said a prominent UAE government official.

"It is early days to say about the impact he could create but he is a strong candidate for the post and will be a force to reckon with," he said.

Al Suweidi's term expired in July 2012 and no official announcement had since been made about an extension. An advocate of developing the local bond market, he helped steer the UAE through the 2008 global crisis and tightened some regulations such as introducing mortgage caps in 2012.

The central bank chairman, who heads board meetings and has the final say on policy decisions, is involved in strategic decision-making, while the governor steers the bank's day-to-day operations and represents it at high-level international events.

As long as the UAE keeps its dirham currency pegged to the US dollar, the central bank is unlikely to diverge much from the Fed, giving the new governor little room for flexibility.

"It will have no impact on monetary policy, clearly, but could affect regulatory policy in theory," said an economist, who declined to be named.

"I suspect if at all, there will be tougher restrictions on lending and the real estate sector, and to GREs (government-related entities). But in reality, these decisions are made at the top level and fed to the central bank, so I am not sure it makes much of a difference who is at the helm," he said. - Reuters




Tags: UAE | Central Bank | governor |

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