Dubai, UAE–The central banks of Saudi Arabia, the UAE and Bahrain have increased their interest rates after the US Federal Reserve raised its target interest rate by a quarter of a percentage point on Wednesday.
The Saudi central bank, known as SAMA, and the central bank of Bahrain upped their interest rates by 25 basis points.
The central bank of the UAE has decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points – from 4.4% to 4.65%, effective from Thursday, 02 February 2023.
This decision was taken following the US Federal Reserve Board’s announcement on
01 February 2023 to increase the Interest on Reserve Balances (IORB) by 25 basis points.
“Inflation has eased somewhat but remains elevated,” the US central bank said in a statement.
Also read: GCC central banks should hike rates to combat inflation: L’AZURDE CEO
The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate.
The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of the CBUAE’s monetary policy.
Qatar, however, has decided to continue with the current interest rates for QCB Deposit Rate, QCB Lending Rate, and QCB Repo Rate.
QCB explained that its decision aims to maintain the current interest rates at an appropriate level to support sustainable economic growth.
QCB stressed that it will continue to assess the appropriate monetary policy, taking into account all the aspects, which may affect the financial stability and will review its monetary policy as and when appropriate to address changes in economic requirements.
Qatar Central Bank continued with the current interest rates as follow: QCB Deposit Interest Rate (QCBDR) at 5%, QCB Lending Interest Rate (QCBLR) at 5.50%, and QCB Repo Rate (QCBRR) at 5.25%