UAE Central Bank announces 25 billion dirhams in government treasury bonds

According To Amac News: UAE Finance Minister Maktoum bin Mohammed bin Rashid Al Maktoum stressed that the success of the program will help strengthen its position as an attractive and nurturing investment destination globally.
The UAE finance minister made the remarks as the finance ministry released the results of the government treasury bond and Islamic treasury securities programs launched in 2022.
He added that this success reflects the UAE's strong credit and significant economic capabilities, which support the strong performance of the financial sector and contribute to sustainable growth.
He emphasized the importance of continuing efforts to launch and support transformative projects and schemes that would help develop the financial sector and support the country’s future strategic plans.
The Ministry of Finance has announced that since the launch until the end of August 2024, they have issued Treasury bonds worth Dh11.2 billion and Islamic Treasury Securities worth Dh13.8 billion for Dh25 billion.
The ministry added that it had settled the value of its two-year treasury bonds at Dh4.85 billion in May 2024, bringing the total outstanding bonds to Dh6.35 billion.
According to the Ministry of Finance, the total outstanding domestic public debt for both the State Treasury Bond Program and the Islamic Treasury Securities Program has reached AED 20.15 billion by the end of August 2024.
In 2022, the Treasury Bond Program was launched in collaboration with the UAE Central Bank as the issuing and paying agent, to issue government treasury bonds in the local currency (dirham). The securities are settled through a local platform called the Bloomberg Auction System, which meets international standards and is operated by Euro clear Bank.
The banks appointed to manage the subscription process include six major banks in the UAE: Emirates NBD, Abu Dhabi Commercial Bank, First Abu Dhabi Bank, Mashreq Bank, HSBC, and Standard Chartered Bank, which act as the main distributors of Treasury bills .
Bonds worth Dh9 billion were issued under the program in 2022, spread across 6 auctions by the end of the year, at Dh1.5 billion per auction. In 2023, two additional auctions worth AED 2.2 billion were launched, bringing the total issuance under the Treasury bond program to AED 11.2 billion.
On May 11, 2024, the ministry repaid Dh4.85 billion of two-year Treasury bonds, bringing the total outstanding bonds to Dh6.35 billion.
In the first auction of 2023, Dh1.1 billion worth of bonds were issued, split into two two-year and five-year tranches, with bids totaling Dh6.85 billion, exceeding the subscription size by 6.2 times, and premium prices with An equivalent difference was obtained.
Government Treasury bonds (Bonds) and Islamic Treasury Dirham Sukuk (T-Sukuk) contribute to the establishment of the local currency bond market and the development of the medium-term yield curve. These bonds and securities will be issued on a prorated basis with varying maturities of two, three and five years, and there are plans to issue long-term bonds and securities in the future.
The issuance of these securities in local currency helps diversify financial resources, stimulate the domestic financial and banking sector, and create secure alternatives for investment for domestic and foreign investors to the local currency.