DIPLOMA IN BUSINESS AND MANAGEMENT

(AB101)

MACROECONOMICS
(PEC2143)

TITLE :

ANALYZING MONETARY POLICIES DURING CRISIS IN 2008

COUNTRY:
UNITED ARAB EMIRATES

PREPARED FOR :
MADAM NORHAFIZAH MOHD RAYA

PREPARED BY :

NAME ID NUMBER

ARIANEE BINTI AHMAD SAINI BGN210210538

JULIA NATASYA BINTI JUHARI BGN210210583

NUR AMIRA NATASYA BINTI NORDIN BGN210210493

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TABLE OF CONTENT

COUNTRY’S BACKGROUND 02
A) Year of establishment
B) The Chief Executive Officer (CEO)
C) Mission and vision
D) Product and services offered

MONETARY POLICY STRATEGIES IMPLEMENTED DURING

CRISIS IN 2008 05

REFERENCES 08

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BACKGROUND

A) Year of Establishment

Emirates NBD began as the National Bank of Dubai (NBD) on 19 June 1963, by the-ruler
Sheikh Rashid bin Saeed Al Maktoum, establishing the first national bank in Dubai. On 6 March
2007, NBD merged with Emirates Bank International (EBI) to form Emirates NBD. Emirates
NBD's shares were officially listed on the Dubai Financial Market (DFM) on 16 October 2007.
Emirates NBD acquired Dubai Bank on 1 December 2012.

B) The Chief Executive Officer (CEO)

Shayne Nelson

Shayne Nelson is a seasoned banker who has worked in a variety of industries. Shayne's
presidency as Group CEO of Emirates NBD increased the bank's market capitalization from
AED 15.8 billion to around AED 90 billion. Prior to joining Emirates NBD, he was the Chief

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Executive Officer of Standard Chartered Private Bank in Singapore for three years. He was also
the Chairman of the Standard Chartered Saadiq Islamic Advisory Board and a member of the
Standard Chartered Bank (China) Ltd Board of Directors.

Shayne's previous high-profile banking positions include five years as Regional CEO of
Standard Chartered Bank Middle East and North Africa based in Dubai (2006-2010), Chairman
of Standard Chartered (Pakistan) Limited, and Chairman of the Banking Advisory Council to the
Board of the Dubai International Financial Centre. He was also the Chief Executive Officer and
Managing Director of Standard Chartered Bank, Malaysia Berhad, headquartered in Kuala
Lumpur.

C) Mission and Vision

1. Mission

Emirates NBD Securities aims to provide unparalleled brokerage services to its

clients in the region

2. Vision

To be the most innovative bank for our customers, people and communities.

D) Product and Services Offered

1. Accounts
1.1 Current account
1.2 Savings and deposit account
1.3 Value account, Gold Investment account and Islamic current account

2. Cards
2.1 Credit card
2.2 Debit card
2.3 Prepaid card
2.4 Commercial card

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3. Loans
3.1 Personal loans
3.2 Home loans
3.3 Auto loans

4. Foreign exchange

5. Wealth

6. Insurance
6.1 Motor insurance
6.2 Travel insurance
6.3 Home insurance

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MONETARY POLICY STRATEGIES IMPLEMENTED DURING CRISIS IN 2008

Monetary policy impacts the money supply in an economy, which will then give an impact
to a country’s interest rate and also the inflation rate. It is formulated to control the money supply
changes of the country parallel with the growth of the gross domestic product (GDP). A country
like the United Arab Emirates (UAE) must manage their money supply to stabilize the economic
condition with various policy tools.

During the Global Financial Crisis in 2008, the United Arab Emirates implemented
expansionary monetary policy to control unemployment and increase GDP. Due to this
economic recession, the country intends to expand their money supply by conducting an open
market operation. The central bank of the UAE purchases government securities from the state
banks that ultimately will increase the reserve and loanable funds within the economy. The open
market operation through buying and selling securities is based on the economics condition. So,
government securities like treasury bills, bonds are bought and sold to manage the money
supply in the economy by controlling bank reserves.

The Gross Domestic Product of UAE from 2008-2017

Besides that, the UAE’s central bank also employed a discount rate policy tool. It is to
sustain an appropriate funds level that is often based on the monetary authority's willingness to
discount banks loans once they run out of liquidity along with the increase in the money demand
in the country. However, this discount rate is relatively lower than the market prevailing interest
rate. The government aimed to extend the money supply within the economy, hence the low and
the decreasing discount rate implemented. This instrument played a key role in the funds growth
that is important in increasing real gross domestic product (GDP) and lowering the
unemployment level.

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 The Money Supply of UAE from 2008-2017

Lastly, the UAE’s government another important tool for them to increase money supply
and aggregate demand, the reserve requirement ratio was employed by the central bank. It is a
mandatory central bank regulation for every commercial bank to keep some percentage of their
deposits into reserves. If the central bank goal is to boost the money supply growth in the
economy, then the reserves ratio will decrease. The ratio of the reserve requirement will
increase, if the objective is to dampen the money supply in the economy. By increasing money
supply, the government decreased the cash reserve ratio so that commercial banks do not have
to keep a lot of deposits. It increased the amount of money that was loaned out to the public.

The relationship between GDP and MS during 2008-2017

To conclude, these three tools – open market operation, discount rate and legal reserve
requirement played a key role in the expansion of financial institutions loanable funds,
smoothness of business cycles, suitable modification between demand and supply of money,
and appropriate interest rate arrangement. In addition, they have a significant importance in
achieving the United Arab Emirates (UAE) monetary policy objectives which is lowering

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interest rates and making available cash easier to obtain for large businesses such as the
airlines.

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REFERENCES

Ahmad, N., Nisa, Z., Mohd Ramli, I., & Abd Ghani, R. (2022). Essential of Economics.

McGraw-Hill Education (Malaysia).

Bennett, A., & Marston, D. (2001, August 2). United Arab Emirates: 2008 Article IV

Consultation—Staff Report; Staff Statement; and Public Information Notice on the

Executi. International Monetary Fund. Retrieved January 27, 2023, from

https://www.imf.org/external/pubs/ft/scr/2009/cr09124.pdf

Emirates NBD. (n.d.). Profile. Emirates NBD | Financial Services and Online Banking in Dubai

and UAE. Retrieved January 21, 2023, from https://www.emiratesnbd.com/en/

Emirates NBD. (n.d.). Shayne Nelson - Chief Executive Officer (Group CEO). Shayne Nelson.

Retrieved January 21, 2023, from

https://beta.emiratesnbd.com/en/about-emirates-nbd/management-team/shaynenelson

International Monetary Fund. (2010, January 7). Impact of the Global Financial Crisis on the

Gulf Cooperation Council Countries and Challenges Ahead; MCD Departmental Paper

10/. International Monetary Fund. Retrieved January 28, 2023, from

https://www.imf.org/external/pubs/ft/dp/2010/dp1001.pdf

Jreisat, A. (2017). Global Financial Crisis and Productivity Changes of Banks In UAE: A

DEA-MPI Analysis. International Journal of Business and Society (IJBS). Retrieved

January 27, 2023, from

http://www.ijbs.unimas.my/images/repository/pdf/Vol18-s3-paper2.pdf

Sharma, S. D. (2010, January). Contemporary Arab Affairs. The Arab world amidst the global

financial crisis of 2008–2009.

https://www.jstor.org/stable/48599700?read-now=1&seq=1#page_scan_tab_contents