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Reserve Management

Our Reserve Management department manages the UAE’s official foreign exchange reserves, in line with:

  • The Central Bank of the UAE Investment and External Fund Management Policies, which are approved by the CBUAE Board of Directors.
  • International best practices.

Our Role

The UAE’s official reserves are managed in line with:

  • The global standards outlined in the International Monetary Fund’s (IMFs) Guidelines for Foreign Exchange Reserve Management.
The policy objectives in holding the official reserves are to:
  • Support confidence in the exchange rate policy.

  • Reduce fluctuations arising from the balance of payments and/or the domestic banking system.

  • Facilitate foreign currency transactions between government departments and the local banking system.

  • Maximise returns at an acceptable level of risk.

External fund management

The External Management & Analytics Team consists of professionals with experience in analysis, selection and oversight of external fund managers. The team is guided by the External Fund Management Policy, as approved by the CBUAE Board of Directors. The rationale in using external fund managers is that specialist external expertise will contribute most effectively to investment returns on a risk-adjusted net-of-fee basis. The CBUAE uses external managers for specialist mandates where internal capacity is not available, or as a peer group for larger internal mandates.

Internal Investment Management

The Internal Investment team consists of professionals experienced in managing the foreign exchange, gold, money and capital market assets held in the official reserves. These assets are invested in global financial markets, in line with the Investment Policy and detailed Investment Guidelines.

FAQs

The official foreign exchange reserves are legally owned by the Central Bank of the UAE and form part of its balance sheet.

The official foreign exchange reserves stand at around $100 billion. The most recent data are found in the monthly statistics section of this website.  

The foreign exchange reserves are prudently managed by the Central Bank of the UAE and are invested in accordance with the Investment Policy and External Fund Manager Policy approved by the Board of Directors.  

The official reserves are invested in a well-diversified global bond portfolio in all major bond markets and a sizeable portfolio of money market assets. All assets are of investment grade quality and currency risk is fully hedged to the US dollar, as the Dirham is pegged to the US dollar. This ensures the assets are safe and liquid, while also obtaining a good risk-adjusted return.  

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Last updated on: Thursday 28 July 2022

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