The banking sector increased its statutory reserves at the UAE Central Bank by Dh8.6 billion ($2.34 billion) during H1, 2017, bringing to Dh125.5 billion ($34.16 billion) the total required reserves by the end of June, according to CB statistics.

Statutory reserves are the minimum liquidity banks are required to hold against client deposits without getting interests in return, reported Wam, the Emirates official news agency.

The required minimum level of compulsory reserves now stands at 14 per cent on current, savings and demand accounts, and 1 per cent on term deposits.

In a move reflecting banks' commitment to keep high solvency ratios, required reserves have been progressively growing over the first six months of the year, rising by Dh1.9 billion to Dh118.7 billion in February and to Dh119.9 billion by the end of March.

The month of June was the top performer as compulsory reserves surged by Dh3 billion, with May's levels up Dh2 billion and Dh699 million in April.

Compulsory reserves are among the tools used by banks to achieve their fiscal policies in addition to other vessels, including overdrafts, advance facilities, fraud preventive measures, certificate of deposits, Certificates of Deposit Repurchase Agreement, REPO, and liquidity support facilities.