Liquidity to alleviate economic impact of pandemic
The Sharjah Finance Department (SFD) recently established a framework worth AED 4bn (US$ 1.09bn) to enhance liquidity for the Sharjah banking system in the emirate. This move was aimed at providing additional financial assistance to all businesses impacted by the outbreak of Covid-19.
Issued as 12 month dirham-denominated paper in several tranches, the Sharjah Liquidity Support Mechanism (SLSM) sukuk represents the first rated short term local currency tradeable instrument in the UAE, which can be used for liquidity management by banks. This paper has a short term investment grade rating of A-2 by Standard & Poor’s rating agency.
“The authorities in Sharjah and across the region are taking the required measures to provide maximum assistance to all businesses dealing with the impact of the outbreak,” remarked Waleed Al Sayegh, Director General, Sharjah Finance Department.
A first tranche of the SLSM was subscribed to in May by Bank of Sharjah with an AED 2bn (US$ 545mn) participation. Subsequent tranches with one or more other banks are expected to expand the SLSM to AED 4bn.
