UAE central bank hikes interest rates too after US Fed

Dubai: The UAE central bank said on Thursday it has raised interest rates applied to its Certificates of Deposits by 25 basis points after the US Federal Reserve hiked Fed funds rate on Wednesday.

Analysts suggest that this would increase borrowing costs for consumers. Certificates of Deposit, which the central bank issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the local banking system.

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Other countries in the Gulf like Saudi Arabia, Qatar, Oman and others also increased rates alongside the UAE. Fed has indicated a faster pace of rate hikes next year, indicating that rates may be raised thrice in 2017.