If adhered to a new report, the stimulus needed to restore confidence in the emirate's economy would be provided by the $20 billion (Dh73.4bn) bond issue launched by the Dubai Government in response to the global financial crisis.

The study carried out by the Dubai Chamber of Commerce and Industry says that the bond sale has actually come as a way for Dubai to raise money at a cheap rate apart from providing the government with the much required funds to alternate for the liquidity that has dried up globally and meet all upcoming financial obligations.

Via this bond issue, access to funds would be given to government entities in order to meet the commitment to finish all infrastructure projects, enhance government spending and clear the way for more focus on some of the stimulus programmes.

The study further said, "The issue will serve as a springboard for the acceleration of economic activity and the restoration of global confidence in the overall economic stability and growth outlook of the emirate. The five-year period of the bond means that the crisis will be long over before the bond matures."

The Chamber holds a viewpoint that Dubai would be able to meet all its immediate debt obligations, complete development projects, ease the tight liquidity situation in the economy and help build market confidence by the proceeds of the issue, which was announced in February.

Chamber said, "It is almost certain to buoy financial markets and put a floor under local and international investor confidence."

The basic aim behind the launch of the bond was to cover loans that financed Dubai's aggressive development strategy and the UAE Central Bank fully subscribed the $10bn first tranche.

The setting up of a market would be facilitated by the UAE Central Bank for government bonds and sukuk.

(Via TopNews Arab Emirates. Contributed by Aabid Hussain)