The UAE central bank is planning to set up an interbank offered rate that would create an official benchmark for the dirham's offered rate, and ensuring a better view of "prevailing market conditions."

"The objective behind this initiative of the central bank is two-fold - primarily to set up an official benchmark for the Dirham offered rate and ... to facilitate a process whereby the rates fixed are a fair representation of the prevailing market conditions," the bank said in a statement.

The central bank has already held discussions with lenders on the establishment of the Emirates Interbank Offered Rate (EIBOR) and would complete the process with a selected panel of banks, it said. -Reuters