The Central Bank of the UAE kept its base rate on the overnight deposit facility unchanged at 3.9% on Wednesday, following the US Federal Reserve’s decision to hold interest rates.
The UAE central bank also kept the rate for borrowing short-term liquidity from it at 50 basis points above the base rate for all standing credit facilities, Gulf News reported. The base rate is anchored to the Fed’s interest rate on reserve balances and sets an effective floor for overnight money market rates in the UAE.
The Fed left its benchmark rate in a range of 3.75% to 4% on Wednesday, even though US inflation remains above its target.
Qatar Central Bank kept its deposit rate at 4.10%, its lending rate at 4.60% and its repurchase rate at 4.35%, the Qatar News Agency reported, citing a post by the central bank on X.
The Central Bank of Bahrain kept its overnight deposit rate unchanged at 4.50%. The Central Bank of Kuwait also left its rates unchanged, CNN Business Arabic reported.
Most Gulf currencies are pegged to the US dollar, and the region’s central banks usually move their policy rates in step with the Fed to keep their currencies stable and limit pressure on capital flows.
