…To Alleviate Economic Impact Of COVID-19
By Celestine Okorie
Sharjah Finance Department (SFD) recently established a framework worth AED 4 billion(US$1.089billion) 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.Director-general of Sharjah Finance Department HE Waleed Al Sayegh said: “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. This service will allow banks to use the Sukuk as security to access liquidity facilities at the UAE Central Bank, by following the required guidelines.”He further added that since the beginning of the crisis, Sharjah Government has introduced several packages and services to support companies and individuals. 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.