UAE foreign reserves near $300bn as Central Bank assets hit record AED1,095.6bn
UAE foreign reserves climbed to AED1,095.6 billion by end‑February 2026, about $298.5 billion, the Central Bank reported, reinforcing the dirham peg and financial resilience.
Central Bank report for end‑February 2026
The Central Bank of the UAE reported that total foreign assets stood at AED1,095.6 billion as of February 28, 2026, marking an all‑time high despite global market volatility. This figure, equivalent to roughly $298.5 billion, reflects continued net inflows and active reserve management. Officials described the outcome as evidence of sustained external liquidity and robust balance‑sheet buffers.
Breakdown of reserve holdings
The Central Bank’s breakdown shows foreign bank deposits and balances of AED270.5 billion, or about $74 billion, held with overseas banks. Foreign securities — mainly government bonds and treasury bills — accounted for AED762.6 billion, roughly $207.8 billion. Other foreign assets totalled AED62.6 billion, around $17 billion, and most of the reserve stock is denominated in US dollars.
Usable reserves and import coverage
Within the headline total, the Central Bank estimates directly usable reserves at approximately $220–$230 billion. That level provides a substantial liquidity cushion and the capacity to cover a wide margin of import needs for the economy. Market analysts say this usable component underpins the UAE’s ability to smooth external shocks and to maintain confidence in the dirham’s dollar peg.
Regional ranking and economic implications
By size of foreign assets, the UAE remains the second‑largest reserve holder in the Gulf Cooperation Council and occupies the same position across the Arab region. The standing reflects the country’s successful diversification away from oil revenues and the strength of its financial and non‑oil sectors. Observers note that such rankings also enhance the UAE’s profile in regional capital markets and among international investors.
Impact on monetary policy and market stability
High reserve levels give the Central Bank wide scope to manage liquidity and to intervene in foreign‑exchange and money markets when needed. This operational flexibility reduces the risk of abrupt currency moves and supports steady interest‑rate transmission in the domestic economy. Confidence in the reserve position also contributes to lower borrowing costs for sovereign and corporate issuers in the UAE.
Reserve management strategy and diversification
The composition of holdings — a mix of bank deposits, liquid securities and other foreign assets — indicates a conservative approach prioritising liquidity and capital preservation. Diversification across instruments and jurisdictions helps mitigate concentration and market risk while allowing modest returns on the reserve stock. The Central Bank’s stated investment and liquidity policies aim to balance yield objectives with ready access to funds for policy operations.
The Central Bank’s February 2026 figures therefore signal stronger cushions against external pressures and reinforce perceptions of the UAE as a stable financial hub in a turbulent global environment.
