Central Banker Report Cards 2026

Denmark arguably delivered the strongest macroeconomic performance across Western Europe. The economy grew 6.2% year over year in the first quarter.

Unemployment stood at 2.7% in May, and consumer inflation remained at 1.9% in June, despite the ongoing energy price shock.

Regarding the rates policy, Governor Christian Kettel Thomsen kept the spread against the ECB unchanged, matching Lagarde’s 25-basis-point June hike within a day of the decision and raising the certificates of deposit and current account rates to 1.85% and the lending rate to 2%. The krone required no intervention at any point during the period.

Strong domestic momentum made the increase straightforward to absorb. With the real policy rate still marginally negative, tighter nominal rates did little to restrain activity. Thomsen’s consistent communication meant the decision was fully anticipated and passed through without disrupting lending or the currency.

The 74-year-old Julio Velarde was reappointed in July for a fifth consecutive five-year term at the request of then President-elect Keiko Fujimori. Velarde has showed a steady and secure hand in managing monetary policy over 20 years, and also built a strong institution that economists believe will continue to thrive after his departure.

“Despite Peru’s highly turbulent political environment in the past decade, the [Central Reserve Bank of Peru] under Julio Velarde has preserved its reputation for prudence and policy credibility. Velarde is expected to remain as governor for now, but attention is increasingly turning to succession planning,” says Beatriz Garcia-Nunes, economist at Deutsche Bank in New York.

“I think there are enough people below Velarde that, when he steps down, there won’t be much disruption. Velarde is highly credible with the markets and, at the same time, has remained very well respected politically within Peru,” said Natixis’ Berber.

“To that extent, he has stayed above the political infighting, and that will be the challenge for his successor. But I think he has developed a very credible team beneath him. I doubt there will be any issues with the succession when he leaves,” Berber added.

During the past year, Chile maintained a steady stewardship of the economy. “Governor Rosanna Costa has led the Central Bank of Chile since February 2022 and has a strong track record of bringing inflation down toward the bank’s 3% target while helping anchor inflation expectations. Inflation has fallen sharply, from a peak of 14.1% in August 2022 to 2.4% in February 2026, alongside a gradual reduction in the policy rate from 11.25% to 4.5%,” said Forrest Cyr, a Latin America country risk analyst at BMI, a Fitch Solutions company.

Despite external supply-side pressures, the central bank maintained the course over the past year. “The BCCh has weathered the oil shock well, helping keep inflation expectations anchored over the policy horizon and containing second-round effects. It has shown a pragmatic and credible approach to policy,” said Francisco Campos Ortiz, chief LatAm economist at Deutsche Bank.

Economists say the central bank’s stability reflects Chile’s long-standing institutional credibility. “The big story in Chile is not the central bank but the new government’s sweeping economic reform bill. In that sense, the central bank has not been a factor—neither negative nor positive,” said Natixis’ Berber.

Costa Rica had a slightly negative inflation, equal to about -0.1%, in 2025; and the forecast for 2026 is around -0.4%. At the same time, the economy has maintained a healthy growth rate, equal to 4.6% in 2025 and projected to be 3.6% in 2026.

The IMF’s Report for the 2026 Article IV Consultation concludes that Costa Rica continues to display “very strong economic fundamentals,” successfully weathering external shocks despite increased global uncertainty. According to the IMF, “Monetary policy should stand ready to bring inflation and inflation expectations back to target in a sustained way. The real policy rate is above staff estimates of neutral, and inflation would remain below the central bank’s target until at least 2029 … This appears to be clear evidence for a reduction in the policy rate. However, the expected pass-through of higher global commodity prices (e.g., oil, grains, and fertilizers) to headline inflation provides some room for a pause in monetary easing.” Fiscal performance remains strong following years of consolidation. The IMF Executive Board also reaffirmed Costa Rica’s qualification for the Flexible Credit Line, a precautionary facility reserved for countries with exceptionally strong policy frameworks. Overall, the medium-term outlook remains favorable, although downside risks from the external environment warrant continued policy prudence.

Guatemala’s economy is showing good performance, with real GDP growth of 4.1% in 2025 and a forecast of around 3.9% in 2026. Inflation remains low and under control: about 1.6% in 2025 and projected to reach around 2.6% in 2026. Guatemala maintained prudent macroeconomic policies, combining fiscal discipline with increased public investment in infrastructure and social programs. The key monetary policy instrument of the Bank of Guatemala (Banguat) is the policy interest rate. As of August, the policy rate stands at 3.5% following a 25 basis-point reduction in February. The central bank has maintained this rate since then, citing subdued inflation and stable macroeconomic conditions.

The Article IV mission report published by the IMF in June states that “Banguat’s cautious approach to policy easing has, in hindsight, proven appropriate amid heightened uncertainty surrounding commodity prices and external conditions. Well-anchored inflation expectations point to continued policy credibility, while ample reserve buffers provide Banguat with room for maneuver in conducting monetary policy less dependent of U.S. Fed policy movements.” The IMF also points out that “the banking system remains sound, with strong capital and liquidity buffers and solid profitability.”

The epithet “Goldilocks economy” would be music to the ears of any central bank governor running the economy in question. That music has been playing for Malhotra since he took the helm of the Reserve Bank of India in December 2024.

He inherited a challenging economic landscape but hit the ground running with a cumulative policy rate cut of 125 basis points in 2025, taking the repo rate to 5.25%, enabled by super-low inflation. These moves helped propel GDP growth to an estimated 7.6% in fiscal 2025-26 and makes India the world’s fastest-growing major global economy, according to data from the Organization for Economic Cooperation and Development.

Regulatory simplification—consolidating thousands of circulars into master directions—and greater accessibility improved the banking environment and central bank policy transmission. This highlights Malhotra’s reformist mindset, which aims to reduce the notoriously heavy red tape in India’s business environment.

The central bank has held a neutral stance in 2026. The CPI is projected at around 5% for fiscal year 2027—1% above the target—while growth is forecast to hit 6.7%. Malhotra has stressed price stability as his primary mandate but presiding over turbocharged economic growth is considered a welcome side effect.

Jamaica was devastated by Hurricane Melissa in October 2025. The storm forced fiscal and monetary authorities to adopt emergency measures. The IMF supported this effort, providing $415 million through the Rapid Financing Instrument under the large natural disaster window. The temporary fiscal expansion needed to respond to the catastrophe and the supply constraints created by the destruction of infrastructures and production plants inevitably put some pressure on prices. Nevertheless, monetary policy remained focused on price stability under the Bank of Jamaica’s inflation-targeting framework. Exchange rate flexibility was maintained as the primary absorber of external shocks, while adequate international reserves and central bank credibility helped anchor inflation expectations.

The IMF concluded that Jamaica’s strong fiscal institutions, independent central bank, and prudent macroeconomic policies provide the basis for effective response to the disaster without harming medium-term debt sustainability. According to the note released in January, “Staff is confident that the authorities will pursue appropriate policies based on their strong track record and policy commitments as well as a robust institutional framework for macroeconomic management.”

Similar conclusions are contained in a note of the Inter-American Development Bank: “Overall, Hurricane Melissa was a catastrophic natural disaster from which Jamaica will take several years to recover. But Jamaica had developed an exceptional financing framework that made critical resources available to the government in the immediate aftermath of the disaster to support relief efforts.”

In August, Byles’ seven-year tenure as governor ended and Brian Langrin succeeded him.

With one of the highest rates of growth in the region, Paraguay is a darling of international investors; and its central bank is operating smoothly. GDP expanded by 6% in 2025 and is projected to increase by 4.2% in 2026, driven by broad-based sectoral growth, including double-digit expansion in agriculture and strong contributions from services and industry.

“The BCP has held rates steady at 5.5% since February 2026 and has rightly taken a cautious stance amid lingering risks from the U.S.-Iran conflict. The bank is in no rush to move, with inflation below the midpoint of the central bank’s target range, expectations anchored, and Paraguay still maintaining one of the fastest growth rates in the region,” says Shanna Bober, a Latin America country risk analyst at BMI, a Fitch Solutions company.

Bober added, “The BCP is also likely to stay on hold to support the guaraní, which is expected to depreciate modestly in H2 2026 after a strong start to the year. That strength partly reflects growing investor confidence in Paraguay’s policy credibility and macroeconomic stability, making it one of the region’s steadier stories. With the policy rate now at what the bank considers a neutral level, we expect the BCP to remain on hold through the rest of 2026.”

Chia Der Jiun, who has served as managing director of the Monetary Authority of Singapore since January 2024, was reappointed in May to a term ending May 2028. He has steered the central bank through a period of heightened global uncertainty while maintaining Singapore’s macroeconomic stability and financial center strengths.

Monetary policy has remained carefully calibrated. The MAS maintained an appreciating Singapore dollar nominal effective exchange rate stance through late 2025 and into early 2026, then tightened further in April 2026 in response to rising imported inflationary pressures.

Core inflation remained low—below 1% in 2025—before rising modestly to around 1.4% to 1.5% in the first half of 2026, with market consensus projecting 1.9% for the full year. GDP growth was 5% in 2025, bouncing to an eye-catching 6% in the first half of 2026.

The MAS advanced innovation priorities, including AI adoption, quantum resilience planning, stronger cyber defenses against AI-enabled threats and broad-based growth in the financial sector, reinforcing Singapore’s position as a trusted international financial center. An appreciating investment portfolio helped the MAS record a chunky net profit of S$20.0 billion (about U.S.$15.6 billion) for fiscal year 2025-2026.

Online gambling has become a major issue in South Africa. Last year, a staggering $91.5 billion was wagered, a 31.3% year-on-year increase. Based on the amounts being wagered and rising gross gambling revenues, the surge could pose systemic vulnerabilities for the financial sector in the future, said Kganyago, governor of the South Africa Reserve Bank.

The country nevertheless boasts a vibrant financial sector. Last year, the top five banks generated a combined $9.2 billion in profits. That makes the industry a bright spot in an economy that remains in tatters due to external and internal troubles including political instability, corruption, high unemployment, and civil unrest. Growth is projected at 1.1% this year.

Despite the challenges, Africa’s longest serving central bank governor remains steadfast about ensuring macroeconomic stability. Surging inflation has forced the SARB to tighten monetary policy; in May, it raised its repo rate by 25 basis points to 7%, the first hike since 2023, then left the rate unchanged in July. The previous month, inflation rose to a two-year high of 5%. With inflation expected to stay above 4% in the coming months, the SARB has indicated more interest rate hikes could be on the cards.

Times are good in Albania: GDP grew 3.8% last year, with 3.4% expected this year according to EBRD. The policy rate has remained unchanged since mid-2025 at 2.5% and inflation has stayed low, at 2.6% until mid-2026 when it rose to 3.2% driven by energy price increases, but still within the Bank of Albania’s target rate of 3% (+/-1% each way).

Albania’s EU prospects are also advancing. Alongside Montenegro, it remains one of the most likely next candidates for membership. Brussels’ Interim Benchmark Assessment Report formally places the country in the final stage of accession negotiations, and Tirana hopes to join by 2030. It’s hard to overstate Albania’s achievements in attaining stability and boosting prosperity, something for which Governor Gent Sejko and Prime Minister Edi Rama deserve credit.

“Albania has momentum, achieved on solid private sector balance sheets, a stable economic and financial environment, robust labor markets, positive business and consumer confidence, as well as growing tourism,” Sejko told Global Finance last year.

Following an official visit to Tirana earlier this spring, the IMF positively assessed the Bank of Albania, considering the monetary policy pursued as appropriate and oriented towards maintaining price stability. The IMF representatives agreed with the BoA’s strong lek policy suggesting a free-floating exchange rate is key for keeping Albania’s economy stable and adaptable.

During the past year, Argentina’s economic situation kept improving. While it is no secret that Bausili serves at the pleasure of Argentine President Javier Milei and conducts monetary policy in line with the government’s desires, Bausili still presents a return to a more orthodox economic policy compared to that of the previous Peronist government. This year, under Bausili’s leadership, the central bank has purchased more than $10 billion in hard currency and brought the government close to hitting the IMF’s net reserves target for the end of 2026.

“We would give the president of the Banco Central de la República Argentina, Santiago Bausili, an ‘A’ for his performance. The central bank chief has had to navigate an incredibly tricky macroeconomic environment, with weak domestic demand and declining but still elevated inflation; and he has done so skillfully for the most part,” said Ash Khayami, a senior country risk analyst at BMI, a Fitch Solutions company.

While market observers point to the central bank’s lack of independence from the finance minister and the government, they also broadly praise the bank’s success in accumulating much-needed foreign exchange reserves over the past 12 months. “I think that the central bank has done its part. Despite potential pressures on the exchange rate, it has accumulated reserves—and I think the central bank deserves credit for that,” said Benito Berber, chief economist for the Americas at Natixis CIB.

Growth moderated to an estimated 5% to 5.3% in 2025 and is projected to be 3.9% in 2026 amid weaker tourism, construction and real estate stress, border issues and global headwinds.

The National Bank of Cambodia under Governor Serey maintained an accommodative stance, kept the riel relatively stable, and held solid international reserves (around $25.3 billion in the first half of 2026). The consumer price index averaged just 2.5% last year and is forecast by the Asian Development Bank at 4.5% for 2026.

Banking capital buffers remained robust even as gross nonperforming loans rose toward 10%, with the central bank intervening via supervisory measures and liquidations of sanctioned institutions—including Prince Bank, which is linked to the Prince Group and described as a “transnational criminal organization.”

Usage of the Bakong digital payment system—blockchain-based infrastructure supporting riel and U.S. dollar transfers—continued to expand. It processed over 1.3 billion transactions in 2025 and roughly 1 billion (valued at $136 billion) in the first half of 2026, with strong growth in Khmer riel volumes.

Merchant acceptance increased to millions of points, with new cross-border QR links adding Singapore, India and Laos, among others. This has boosted financial inclusion and gradual de-dollarization efforts without forcing currency shifts.

Governor Aleš Michl’s motto is caution above all else—indeed last year he told Global Finance that “monetary policy should be consistent and credible, not experimental.”

Michl’s approach during his fourth year as governor reflects this philosophy despite, or maybe because of, the government’s strong pro-growth agenda since taking office in November. The 2026 budget is more expansionary than its predecessors with a deficit of CSK 310 billion projected, amidst increased spending in infrastructure and in social areas. However, according to the EU, real GDP growth this year is expected to slow to 1.8% after 2025’s 2.5% with inflation rising from last year’s 2.3%, driven initially by rising fuel, food prices and rising real wages, although ING expects headline inflation in 2026 to be 2% rising to 2.6% in 2027.

Concerns about the latter explain the CNB decision on June 18 to raise interest rates by 25 basis points to 3.75%, the first increase in four years, putting real rates at 1%. Michl suggested the rise was needed because of “risks in the development of loans, debt financing of public spending, and the path of core inflation.”

Most observers believed this would be the last rate rise given what turned out to have been a short-lived rise in inflation coupled with the need to keep growth on track.

In 2026, the monetary policy of the Dominican Republic has remained focused on preserving price stability while supporting a recovery in economic activity after the slowdown experienced during 2025. Inflation was just under 3.9% in 2025 and is projected to be about 5.1% in 2026. These numbers are roughly in line with the target of 4%, plus or minus 1 percentage point. The GDP rate of growth was 2.1% in 2025, and the forecast for 2026 is around 3.7%.

Following the easing measures introduced during late 2024 and maintained through much of 2025, the central bank adopted a largely neutral monetary stance in 2026. The exchange rate continued to adjust gradually under a managed floating regime, with the bank intervening only to smooth excessive volatility rather than defend a specific exchange rate level.

In November 2025, the latest IMF Article IV consultation concluded that the Dominican Republic remained one of the strongest-performing economies in Latin America and the Caribbean, supported by sound macroeconomic policies, political stability—and an investor-friendly business climate.”

Kenya is wrestling with unsustainable public debt. In June, the East African nation’s load reached a $98.9 billion and debt repayment was gobbling up a staggering 71% of revenues. The budget office has warned that at this rate, the country “cannot survive.” Already, it is one of the cards the opposition is fronting ahead of next year’s elections.

The Central Bank of Kenya, for its part, has opted to remain calm and discharge its monetary policy mandate. After a prolonged stretch of easing that lowered its policy interest rate 400 basis points to 8.75% in February, it left the rate unchanged in April and June. Informing the shift was inflation that stood at 6.5% in July, approaching the top of the government’s preferred range of 2.5% to 7.5%.

In the financial sector, CBK Governor Kamau Thugge is defending proposed banking fee regulations that critics contend will increase the cost of services, a move that comes as banks’ non-performing loan ratio remains elevated at 15.3%.

The Persian Gulf conflict has made 2026 an exceptionally challenging year for Kuwait. The kingdom faces one of the deepest recessions in the GCC, with GDP projected to contract 8%, according to a Reuters poll. Governor Al-Haroon has taken a pragmatic approach, employing the Central Bank of Kuwait’s existing toolkit to respond rapidly as needed. The CBK announced a precautionary stimulus package in March that included lower liquidity requirements, the release of capital buffers, higher lending limits, and more flexible liquidity management rules.

Al-Haroon enjoys greater flexibility on monetary policy than most of his GCC peers, whose currencies are all pegged to the U.S. dollar. Since our last evaluation, the CBK has cut the discount rate twice by 25 basis points, bringing it from 4% to 3.5% last December. Inflation is expected to reach 3% this year, up from 2.4% in 2025, but remains manageable.

Overall, Kuwait’s lenders are stable, well capitalized, and profitable; their main challenge is to build on that resilience to support economic diversification and innovation. The kingdom’s addition to FATF’s grey list this year adds further incentive to accelerate reform.

Morocco is still North Africa’s economic driver, with projected GDP growth this year between 4% and 5%. Decades of steady reform and sustained infrastructure investment have paid off, transforming the country into a leading destination for business, and most economic indicators this year are in the green.

Yet, there is a gap between “economic performance” and “citizens’ perception,” according to Jouahri, who has served as governor of Bank al-Maghrib since 2003—one of the longest central-bank tenures in the world. While the disconnect is not specific to Morocco, the BAM is trying to address it from a regulatory perspective. On the monetary side, Jouahri has kept the main policy rate unchanged at 2.25% since last year. According to the central bank’s forecast, inflation should remain contained at 1.5% this year and rise to 2.1% in 2027, just above its 2% target.

The main risk today, however, is a potential spillover from the Middle East conflict, which could push up the cost of imported goods. Morocco’s banking sector is among the strongest in Africa, with major institutions operating large networks across the continent. Looking ahead, the financial sector’s next challenge will be to accelerate digital transformation, ensuring that Moroccan lenders keep pace with the international competition.

In the second half of 2025, inflation in the Philippines remained subdued, in the 1% to 2% range, allowing the Bangko Sentral ng Pilipinas’ Monetary Board, under Governor Eli Remolona, to continue the gradual easing cycle that began in August 2024. It cut a cumulative 225 basis points to February of this year, supporting economic activity despite a volatile peso environment.

Then the scenario shifted as the Middle East conflict drove up global oil and fertilizer prices, a curveball for an agricultural economy that imports much of its oil and petroleum products from that region. Headline inflation rose sharply, to 4.1% in March, 7.2% in April, and 6.8% in May, pushing it well above the 2% to 4% target band.

In response, the board raised the target reverse repurchase rate by 25 basis points in April and again in June, bringing it to 4.75%. Remolona described the moves as measured, aimed at containing second-round effects and anchoring expectations without overreacting.

Meanwhile, weaker public spending and higher energy costs contributed to soft growth. GDP growth averaged 2.6% in the first half of 2026 versus 4.4% in 2025, complicating the inflation-versus-growth trade-off.

Adam Glapiński celebrated his fourth anniversary as Narodowy Bank Polski governor this June and although he has critics within the Donald Tusk government, Glapiński deserves some credit for the benign economic environment of the past year.

Inflation has remained stable, in June at 2.5%, slap in the middle of the NBP’s target range of 2.5% +/- 1%, whilst interest rates—3.75% in July—have been gradually eased from the mid-July 2025 level of 4.75%. Glapiński has been dovish on the underperformance of the zloty versus the other leading CEE currencies, Hungary’s forint and Czechia’s crown which have attracted more buyer interest.

Glapinski can afford to be dovish because investors are mindful of Poland’s success: after GDP growth of 3.5% last year, the NBP is forecasting 3.7% this year supported by EU RRF and Cohesion Funds and growing domestic demand fueled by the rising real wages caused in part by Poland’s tight labor market. Indeed, despite the uncertainties caused by the Iran War, growth has been rising over 2026 with 3.8% registered for the second quarter, against 3.5% in the first quarter.

Glapiński has used the recent fall in the gold price as an opportunity to buy more gold, adding 82 tons this year and reaffirming the central bank’s target of building its gold holdings to 700 tons.

On July 10, Fitch Ratings affirmed Serbia’s sovereign outlook at BB+ with a positive outlook, highlighting a “consistent macroeconomic policy mix, including a strong commitment to exchange rate stability and prudent fiscal management, strengthened international reserves and high GDP per capita compared with ‘BB’ peers … and a record of resilience to external shocks.”

The NBS under Jorgovanka Tabaković—who is now well into her third term as governor—bears its share of the credit for this positive performance, quite different from the sometimes rather chaotic political image Serbia shows to the world. As the IMF concluded after its 2025 review, “the continuation of cautious monetary policy and a resilient financial sector will remain an important anchor in a period of heightened uncertainty.”

As ever Tabaković’s pragmatism has guided NBS policymaking, with the main policy rate of 3.75% in early July exactly as it was one year before. It seems to be doing its job, with inflation at 2.7% in June, down from 3.5% in May, and well within the NBS target of 1.5% +/-3% whilst growth chugs along, with 2026 expected to see GDP rise by 2.8% on top of 2025 fiscal year 2%, with a pick-up to 4% expected in 2027 as Serbia’s economy reaps some of the benefit of the EXPO.

The Swiss National Bank comfortably satisfied its mandate, which defines price stability as inflation below 2% while avoiding deflation. Consumer prices rose 0.5% year on year in June, unemployment stood at 2.9% and the economy grew 0.6% year on year and 0.7% quarter on quarter, a positive result in a period when the eurozone contracted.

Governor Martin Schlegel held the policy rate at 0% throughout, a more active decision than the unchanged figure suggests. With disinflation persistent enough that he conceded negative prints were “well possible this year,” the case for returning to negative territory was live. Schlegel kept the option available without exercising it, arguing that “we cannot exclude negative interest rates” while signaling a clear institutional preference against them.

External developments assisted that restraint. The tariff agreement concluded with Washington, cutting the rate applied to Swiss exports from 39% to 15%, removed much of the pressure that a deteriorating export outlook would have placed on the bank, though the franc near decade highs against both the euro and the dollar continues to weigh on exporters.

As governor of the Central Bank of the Republic of China (Taiwan) since February 2018, Yang Chin-long has presided over turbocharged economic growth while managing inflationary pressures. This is no mean feat in a country where GDP growth is forecast to come in at a staggering 11% this year, due to AI-related demand. The Taiwan dollar has stabilized this year after sharp appreciation pressure in 2025 due to tech-related inflows. The central bank aggressively intervened in the foreign exchange market, building its reserves beyond the $600 billion milestone and prompting renewed criticism from some commentators who contend that the Taiwan dollar is chronically undervalued. The benchmark discount rate remained steady at 2% this year, although Yang publicly noted that the decision was not unanimous, with some board members flagging inflation risks. He said the bank needed to remain “slightly more hawkish,” with any rate changes dependent on incoming data.

Yang has cautioned against potential AI bubble risks, speculative capital expenditure and overleveraging in the tech sector. Still, the Taiwan dollar is range-bound while inflation has been managed near or slightly above the 2% threshold. The central bank projects full-year CPI below 2% in 2026 amid easing imported inflationary pressures.

In June, the Bank of Tanzania celebrated its 60th anniversary. President Samia Suluhu Hassan used the occasion to challenge the central bank to lower borrowing costs and widen credit access to vulnerable groups like women, youth, farmers, and micro businesses.

Credit to the private sector remains vibrant, averaging 24%, but ensuring even distribution is critical for Tanzania, a country whose economy is among the fastest growing but where inequality and poverty remain rampant. This year, GDP is forecast to expand by 5.9%. Inflation, however, has accelerated to its highest level in three years, reaching 4.2% in June. The BoT has responded with a tighter monetary policy; after leaving the policy interest rate unchanged at 5.75% for the third consecutive time in April, it raised the rate 50 basis points to 6.25% in July. The object is to ensure inflation remains within the target range of 3% to 5%.

On a brighter note—literally—the BoT is enjoying the success of its domestic gold-buying program, which has amassed 28 tonnes of gold worth $3.6 billion in just 20 months. The program has been instrumental in strengthening reserves, which increased to $6.8 billion, equivalent to five months of imports cover.

The UAE economy suffered a severe stress test this year as Iranian drones and missiles targeted trade routes and critical infrastructure all the way to the Dubai International Financial Centre. The Central Bank of the United Arab Emirates forecasts GDP growth of 1.7% this year, a drop from 5.6% in 2025. In March, Governor Balama launched a $270 billion Financial Institutions Resilience Package to strengthen liquidity and sustain lending. Measures included giving banks access to up to 30% of their cash and term liquidity facilities in U.S. dollars and dirhams as well as case-by-case assistance.

Despite the shock, the banking sector remains resilient. The CBUAE is also supporting regional stability through a $5.4 billion currency swap arrangement with Bahrain. On monetary policy, the Emirati dirham is pegged to the U.S. dollar and the CBUAE follows the Fed in making policy rate adjustments. Since our last report, the central bank has cut the base rate three times to 3.65%.

Beyond crisis management, the UAE continues to strengthen its position as the region’s leading financial center and a global capital hub. Abu Dhabi and Dubai still attract hundreds of international banks, investors, wealth managers, and fintech entrepreneurs. Supporting the ecosystem is a regulatory approach that encourages innovation in new technologies such as AI and virtual assets.