(MENAFN) The United Arab Emirates (UAE) continues to diversify its funding base by raising 1.1 billion dirhams (USD300 million) from the second auction of conventional dirham-denominated treasury bond issuance. The auction was conducted by the UAE's Ministry of Finance as the issuer, in association with the Central Bank of the UAE as the issuing and paying agent, according to Emirates news agency WAM. The Ministry of Finance announced on Tuesday that the sale of the T-bonds was five times oversubscribed. This strong investor demand through six primary dealers highlights the market's confidence in the UAE's economy and financial stability.
T-bonds are considered risk-free fixed-rate government debt securities that pay interest payments twice a year until maturity, according to Investopedia. The two and three-year tranches of the dual-tranche deal received bids worth 5.51 billion dirhams, demonstrating investors' appetite for the UAE's debt securities.
The UAE's diversification strategy has helped the country to maintain financial stability despite the volatile economic environment due to the pandemic. The country has successfully leveraged its position as a hub for trade and investment, attracting international investors and promoting its economy. The government's commitment to economic reforms and initiatives aimed at boosting growth and innovation has also boosted investor confidence.
The successful auction of T-bonds shows that the UAE's financial market is gaining momentum, and the country is well on track to achieve its diversification goals. The UAE's Ministry of Finance is expected to continue to tap into global capital markets to fund its economic initiatives, and investors can expect more bond issuances in the future. The country's commitment to economic diversification and financial stability will help it to navigate the challenging economic environment and emerge as a resilient and prosperous economy in the future.
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