"Official money is still sent overseas, but private money is not going out of the UAE in a major way," Suweidi said.
The central bank controls no more than 10 percent of the UAE's public overseas assets, analysts said. Official reserves held by the central bank were valued at $16.3 billion at the end of September 2004, according to figures published last week.
But analysts estimate the government of Abu Dhabi controls around $250 billion of assets through the Abu Dhabi Investment Authority (ADIA), which does not publish accounts.
The Gulf Arab state is a federation of seven semi-autonomous emirates, of which oil-rich Abu Dhabi is the capital.
Analysts said the UAE is awash with liquidity following several years of high oil prices. Traditionally, private and public sector investors placed the bulk of their money overseas.
Tighter international regulation especially since the September 11, 2001 attacks on US cities have led many private Gulf Arab investors to keep newly generated wealth at home, Suweidi said.
"Much of it is sitting in bank accounts," he said.
The total liabilities of the UAE banking sector reached 413.7 billion dirhams ($112.7 billion) at the end of September 2004, up from 297.8 billion dirhams at the end of 2001, according to central bank figures.
The percentage of foreign assets to total assets fell to 27.5 percent at the end of September 2004 from 32.7 percent at the end of September 2001.
"In the old days, they (private individuals) would just go and invest their money through banks in Switzerland, London and New York," Suweidi said. "There are more forms, more requirements, so it is not that easy at this point in time. In the old days they used to just sign a piece of paper."
The UAE stock market, along with other Gulf bourses, has benefited from the pools of locally available funds. The Shuaa Capital stock market index more than doubled in 2004. A real estate boom is gripping the country, particularly in Dubai emirate, a regional trading and tourism hub.
Suweidi reiterated that UAE official reserves would remain heavily weighted towards dollar assets, despite the recent fall in the US currency against the euro, yen and sterling.
"The euro is still not the international investment currency. The currency for investment is the dollar; the currency for international trade is the dollar."
The UAE dirham has been pegged to the US dollar at $1=3.67 dirhams since the early 1980s. Suweidi said he could not speak for the foreign exchange policies of emirate-level state investment funds, such as ADIA and those controlled by the government of Dubai.
In late January, Dubai International Capital, a private equity firm owned by the government of Dubai, announced that it had bought a $1 billion stake in DaimlerChrysler.
Analysts in Europe speculated that this could signal a shift by Gulf investors into relatively high yielding European assets.