Sharjah allotted AED 4 billion to reduce COVID-19 impact

The Sharjah Finance Department (SFD) has set up a framework worth AED4 billion to enhance liquidity for the banking system in the emirate.

The move aims to provide additional financial assistance to all businesses which were impacted by the outbreak of novel coronavirus (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.

In a statement today, The Sharjah Finance Department (SFD said the framework paper has a short term investment grade rating of A-2 by Standard & Poor’s rating agency.

“The service will allow banks to use the Sukuk as security to access liquidity facilities at the UAE Central Bank, by following the required guidelines”, said Waleed Al Sayegh, Director-General of Sharjah Finance Department.

A first tranche of the SLSM was subscribed to in May by Bank of Sharjah with an AED 2 billion participation.

Subsequent tranches with one or more other banks are expected to expand the SLSM to AED 4 billion, the statement added.

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