Almost Dh200 billion has been withdrawn from the banking system in the UAE after speculation that the dirham's peg to the US dollar will end and other overseas investors pulled out to cover positions in their home countries after the global financial crisis set in, a top Dubai government official said here on Wednesday.
"Hot money that left the country is approximately Dh200 billion," Nasser Al Shaikh, director general of the Dubai Department of Finance said during a seminar at the Abu Dhabi Chamber of Commerce and Industry.
"Some of it because speculation over the revaluation of the dirham, while other sums were withdrawn because people and companies were covering their positions in their home markets." Hot money refers to funds which flow into a country to take advantage of a favourable interest rate, and therefore obtain higher returns.
Separately, Al Shaikh said Dubai's gross domestic product growth next year is likely to slow down to "4 per cent to 6 per cent" due to the global financial crisis.
He said the supply of apartments next year in Dubai would be lower than expected due to delays in projects by developers.
"The figures we have for new units are - 36,000 units for 2008 and 32,000 units for 2009. This is the best-case scenario we have," he said.
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