Money supply in the UAE grew 2.1 per cent year-on-year at the end of last month, down from a 3.3 per cent rise in the previous month.

M3, the broadest measure of money circulating in the economy and an indicator of future inflation, grew only 1.4pc in February in the slowest pace since at least 2001 as banks grappled with Dubai's debt restructuring, according to a report in our sister newspaper Gulf Daily News (GDN).

It rose to Dh941.2 billion ($256.2 billion) at the end of last month, from Dh934.8 billion ($254.5 billion) at the end of March, central bank data showed yesterday.

Money circulating in the second-largest Arab economy and the world's third-largest oil producer had more than doubled in the two years to the end of 2008.

Bank credit grew 2.4 per cent year-on-year to Dh1,021.9 billion ($278.2 billion) last month, but edged down marginally from Dh1,022 billion ($278.3 billion) in March.

Provisioning levels for non-performing loans rose 4.7 per cent month-on-month to Dh36 billion ($9.8 billion) to reach their highest level since at least December 2008, up from a 2.4 per cent rise in March.