In a bid to boost liquidity in the emirate’s banking system, the Sharjah Finance Department (SFD) has established a framework worth $1.1bn.
The move is said to be 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 tradable 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,” SDF said in a statement.
“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,” remarked SDF director general Waleed Al Sayegh.
Since the start of the crisis, the Sharjah government has introduced several packages and services to support companies and individuals, Al Sayegh stated.
The first tranche of the SLSM was subscribed to in May by the Bank of Sharjah with an $54m participation. Subsequent tranches with one or more other banks are expected to expand the SLSM to almost $1.1bn, the statement said.
