UAE bank economist warns LTV caps ‘detrimental to economy'

Dubai

A loan-to-value (LTV) cap on property loans proposed by the Central Bank of the UAE would have a "detrimental effect" on economic growth, according to the chief economist of one of the UAE's biggest banks.

The Central Bank of the UAE has launched a consultation with banks in the UAE ahead of launching a new system in six to nine months. In a circular to the UAE's banks, the central bank suggested introducing a 50% LTV cap for foreigners buying properties in the UAE and 70% for nationals.

Giyas

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