(MENAFN) The UAE central bank unveiled plans to make changes in its monetary policy framework by launching "the marginal lending facility" (MLF) to enable banks to borrow intra-day and overnight funds, Reuters reported.
The MLF is an electronic platform which will be integrated with a domestic Central Securities Depository (CSD) and the UAE Fund Transfer System and will have interfaces with international depositories, the central bank explained.
It added that banks under its supervision are eligible to sign up to such a facility and will have to maintain eligible collateral with approved CSDs.
During the financial crisis of late 2008, the UAE's central bank provided USD6.8 billion in special collateralised loans to the banking system.
The new discount window policy, similar to those used in developed money markets, could allow more flexible management by the central bank.
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