ABU DHABI, Nov 5 (Reuters) - Banks in the United Arab Emirates will have a grace period of five years before they have to meet new large-exposure rules which the central bank will impose, central bank governor Sultan Nasser al-Suweidi said on Tuesday.
He was confirming comments made on Monday by the head of the country's banking association, who said he expected a grace period of about five years.
Banks over the limit for exposure to the debt of state-linked entities will have to cut their excess lending by 20 percent every year until they reach the limit, Suweidi said.
Details of the new rules will be circulated to banks in about a week, after which they will be published in the official gazette, he added.
Suweidi, speaking on the sidelines of a financial conference, also said he did not expect UAE inflation to rise beyond a normal rate of around 2 percent.
Annual consumer price inflation was at 1.3 percent in September for the fourth month in a row, but rising rents in Dubai and upward pressure on prices in Abu Dhabi have raised the possibility of an increase in inflation nationally.
(Reporting by Stanley Carvalho; Writing by Andrew Torchia) Keywords: EMIRATES BANKS/LOANS
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