• Sat. May 10th, 2025

UAE: Central bank hits pause on interest rate hikes

Following the US Federal Reserve Board’s announcement, keep the key interest rates unchanged, the Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility without change at 5.40%, effectived from yesterday, Thursday, 21 September 2023. The CBUAE has also decided to maintain the rate applicable to borrowing short-term liquidity from the apex bank through all standing credit facilities at 50 basis points above the Base Rate.

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Though the US Fed left the rates unchanged, a move widely predicted by analysts, it has signalled one more rate hike this year, indicating that borrowing costs will likely stay higher for a longer time. “Officials are prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective,” Fed Chairman Jerome Powell said in a statement published after the Federal Open Market Committee meeting.

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Most of the GCC central banks follow the Fed’s policy regarding interest rates as their currencies are pegged to the US dollar.

Source: web

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