Consumer loans in the UAE surged 46 percent in the year to June to 54.03 billion dirhams ($14.71 billion), central bank data showed.

Outstanding loans to individuals living in the second-largest Arab economy at the end of June 2007 amounted to 36.80 billion dirhams, the central bank said in a statement on its website.

Personal loans in UAE, home to 4.5 million people, surged almost 40 percent in 2007 and they have almost doubled in the last four years. Meanwhile, inflation in the world's fifth-largest oil exporter hit an at-least 20-year high of 10.1 percent in 2007.

Like most of its neighbours in the Gulf region, the UAE keeps interest rates low because it tracks US monetary policy.

This has pushed real interest rates -- the official rate minus inflation -- into negative territory, and spurred demand for credit.

Total bank assets advanced to 1.43 trillion dirhams in the second quarter, up from 1.34 trillion dirhams in the first quarter, the central bank added. - Reuters