This “issuance will provide the Dubai government with the necessary liquidity to substitute the liquidity that has dried up globally in the last 12 months and accordingly meet all upcoming financial obligations” and also “continue its development programme,” a statement by the Dubai government said.
The first tranche of 10 billion dollars was fully subscribed by the central bank of the United Arab Emirates.
This is the first such step to help Dubai, part of the seven-member UAE, tackle a slowdown in its real estate sector. Unlike the other emirates Dubai has no oil and must rely on real estate and financial services for its development
A report issued earlier this month showed that US$ 582 billion worth of building projects in the United Arab Emirates, or 45 per cent of the total, had been put on hold due to the economic slowdown.
In order to pursue its own development in the past years the Dubai government went into debt to the tune of US$ 10 billion. For their part government-affiliated firms also accumulated US$ 70 billion in debt.