The Central Bank of the UAE expanded its gold reserves by 19.3 per cent in the first quarter of 2025, adding AED 4.444 billion to bring the total to AED 27.425 billion as of 31 March, up from AED 22.981 billion at the close of 2024. The bank’s latest statistical bulletin also reveals marked increases across demand, savings and time deposits, alongside robust payment-system activity.
Heightened global market unpredictability and a strategic emphasis on diversifying reserve assets underpin the bank’s move to bolster gold reserves, officials say. This reflects a continued shift toward safer, non‑interest-bearing assets amid sustained volatility.
Deposit trends in the banking sector continued on an upward trajectory. Demand deposits reached AED 1.147 trillion by the end of March, up from AED 1.109 trillion in December, with AED 856.062 billion in dirhams and AED 291.116 billion in foreign currencies. Savings deposits rose to AED 338.788 billion from AED 317.48 billion at year-end, while time deposits touched AED 991.757 billion, including AED 614.854 billion in local currency and AED 376.9 billion abroad.
Electronic transfers via the UAE Funds Transfer System surged to AED 5.449 trillion in Q1, comprising AED 3.331 trillion in interbank transfers and AED 2.118 trillion in customer transactions. Cheque-based payments showed significant volume: 5.615 million cheques totalling AED 351.359 billion were cleared through image-based processing, including AED 116.712 billion in March alone.
Cash withdrawal and deposit activity remained vigorous. Withdrawals reached AED 63.887 billion, while deposits totalled AED 47.124 billion during the quarter.
Analysts interpret these developments as a sign of deepening liquidity and enhanced confidence in the UAE’s financial system. A senior economist at a regional bank commented: “The scale of growth in both deposit categories and gold reserves reflects a deliberate strategy by the Central Bank to fortify the country’s buffer against external shocks. Investors are clearly hedging against uncertainty by increasing exposure to tangible assets and maintaining high liquidity.” The economist also cautioned that global interest-rate fluctuations and geopolitical risks could influence the bank’s future asset allocation decisions.
The rise in gold reserves places UAE among regional central banks increasing non‑yielding assets. Analysts point to a broader trend, driven by concerns over inflation and currency volatility in key reserve currencies. A comparative report by a GCC central banking consortium notes that gold reserves across member countries grew by an average of 12 per cent in Q1, with the UAE outperforming peers.
Within the banking sector, sustained deposit growth reflects resilient household and corporate savings. Strong currency‑hedged deposit figures—nearly AED 1.1 trillion in UAE dirhams—suggest that domestic confidence remains high in spite of global uncertainties. Meanwhile, foreign-currency deposits provide necessary coverage for international trade and investment.
Rising transaction volumes through the UAEFTS, which processed transfers worth AED 5.449 trillion, underscore the depth of interbank activity and customer engagement. Stakeholders highlight the central bank’s digital-clearing infrastructure as a key enabler in supporting large-scale financial flows with efficiency and security.
Cheque transactions processed via imaging systems illustrate the continuing relevance of traditional payment instruments, even as the system adapts to technology-driven clearing processes. Meanwhile, high levels of cash withdrawals and deposits indicate ongoing demand for physical currency in everyday commerce and cash-based sectors.
Central Bank officials, responding to questions from regional media, affirmed that quarterly data would continue to inform dynamic adjustments in reserve management and monetary policy. They emphasised readiness to tweak both tangible and liquid asset holdings as required to optimise financial stability and sovereign risk protection.
Understanding the full impact of these developments requires monitoring global monetary shifts and upcoming fiscal announcements. Market observers will be watching for signals in the next Central Bank bulletin, particularly regarding foreign exchange reserves and gold holdings for subsequent quarters.
