UAE Central Bank maintains base rate at 15 basis points after no change from US Fed
But base rate will now be linked to 'interest on reserve balances'
Dubai: The UAE Central Bank has maintained the base rate on the overnight deposit facility (ODF) at 15 basis points. This decision was taken following the US Federal Reserve's announcement on Wednesday to set interest on reserve balances (IORB) at 15 basis points, the UAE regulator said in a statement.
The Central Bank also has decided to maintain the rate applicable to borrowing short-term liquidity from it through all standing credit facilities at 50 basis points above the base rate.
The base rate, which signals the general stance of the CBUAE's monetary policy, shall be anchored to the US Federal Reserve Board's IORB rate, effective from today (July 29). This follows the Fed's announcement that rates applicable on interest on excess reserves (IOER) and interest of requited reserves (IORR) will be replaced by the single IORB rate. Previously, the rate applicable to IOER had been the anchor for the UAE Central Bank's base rate.