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UAE, Saudi, Bahrain follow US with interest rate hike

UAE central bank raises key interest rate by 25 basis points, same amount as US

Image Credit: Ahmed Kutty/Gulf News Archives
UAE Central bank in Abu Dhabi.

Dubai: The UAE, Saudi Arabia and Bahrain followed the US in raising key interest rates on Wednesday, following the announcement from the Federal Reserve.

The UAE central bank said it was raising its key interest rate by 25 basis points, the same amount as the US.

The repo rate for borrowing short-term liquidity from the UAE central bank against certificates of deposit has been increased by 25 bps to 1.75 per cent.

The US central bank raised the benchmark interest rate for the third and final time this year, and officials indicated they are not likely to be more aggressive next year, at least for now.

The Fed’s policy-setting Federal Open Market Committee increased the key lending rate to 1.25-1.5 per cent, an increase of a quarter point.

Saudi Arabia’s central bank raised its reverse repo rate, the rate at which commercial banks deposit money with the central bank, by 25 basis points to 1.50 per cent.

The Saudi central bank also said it was keeping its repo rate, used to lend money to banks, unchanged at 2.00 per cent.

Bahrain’s central bank also raised its key interest rate by 25 basis points.

The central bank’s key policy interest rate on the one-week deposit facility was raised to 1.75 per cent from 1.50 per cent.

In addition, the overnight deposit rate was lifted to 1.50 per cent from 1.25 per cent, the one-month deposit rate to 2.40 per cent from 2.15 per cent, and the lending rate to 3.50 per cent from 3.25 per cent.

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