The aggregate balance of 3-6 month banking deposits amounted to AED157.8 billion during the first eleven months of 2018, 8.4 percent up from the end of 2017, according the Central Bank of UAE figures.
Driven by a hike in interest rates that boosted demand for term deposits, the 3-6 month deposits steadily grew since the commencement of 2018, with Q3 of 2018 seeing the total balance rising to AED180.7 bn before declining to AED150 billion in September.
By October 2018, the 3-6 month deposits rebounded again to AED160.4 bn before stabilising again by the end of November at AED157.8 billion.
The 3-6 month deposits account for 16.5 percent of the aggregate balance of term deposits at the UAE banks, which stood at AED956 billion, according to CBUAE figures.
It’s noteworthy that the interest rates charged by the Emirates Inter-Bank Offered Rate (EIBOR) hit new highs across all terms by the end of 2018, with the six-month rate up 54.4 percent and 12-month term leaping 39 percent, according to CBUAE figures.
The interest hike is attributed to the US Federal Reserve’s decisions that raised interest rates more than four times throughout 2018.