Seven UAE banks have been downgraded in the Fitch Ratings as a result of the economic crisis. These include Emirates Bank International, Mashreq bank, Tamweel Islamic home finance firm, Dubai Bank, National Bank of Sharjah and the National Bank of Ras al-Khaimah.

It has also down graded Dubai Holding Commercial Operations Group (DHCOG) a unit of Dubai ruler Sheikh Mohammed bin Rashid al-Maktoum and Dubai Electricity and Water Authority (DEWA), from A+ to A- . Etisalat, the largest telecom firm, has been put on watch as it has a negative outlook.

Fitch said: "The ability, as reflected by the creditworthiness, of the UAE federal authorities and the emirate of Dubai to provide support has weakened, prompting today's negative rating actions on the banks."

Fitch has forecast that, by the end of 2009, the debt is likely to be tripled, to $30 billion, 40 percent of gross domestic product. To help the government-linked companies to pay off their debt, the release of the second $10-billion trenche of $20-billion bond programme is uncertain.