FUJAIRAH, United Arab Emirates, Nov 10 (Reuters) - The UAE lending market would inevitably be hit by the liquidity crunch, and a global slowdown would add impetus to the Gulf monetary union project, the central bank governor said on Monday.
Sultan Nasser al-Suweidi said the UAE, which pegs its currency to the U.S. dollar, decided not to track the latest U.S. Federal Reserve interest rate cut to bring local rates closer to levels in other Gulf Arab countries.
"The slowdown will be imposed on us ... we will see contractions" in loan growth and other aspects of the economy, Suweidi told reporters on the sidelines of a meeting in the UAE emirate.
Suweidi also said the UAE central bank has not received any applications for mergers between local banks, despite talk of possible consolidation. "We haven't received anything," he said. "I think this subject is not on the top of the agenda."
(Reporting by Ola Galal; Editing by Daliah Merzaban;) Keywords: EMIRATES LIQUIDITY/

(daliah.merzaban@thomsonreuters.com; +971 4 391 8301; Reuters Messaging: daliah.merzaban.reuters.com@reuters.net)

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