The Central Bank of the UAE (CBUAE) and the Central Bank of Bahrain (CBB) have decided to maintain their overnight deposit rate unchanged.
The CBUAE said the Base Rate applicable to the Overnight Deposit Facility (ODF) will stay at 3.65%.
This decision was taken following the US Federal Reserve’s announcement earlier to keep the Interest Rate on Reserve Balances (IORB) unchanged.
The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.
The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.
The Central Bank of Bahrain said the overnight deposit rate will remain unchanged at 4.25%. This decision comes as part of the review conducted by the CBB to maintain monetary and financial stability in the Kingdom in light of global financial market developments.
Earlier, the US Federal Reserve decided to keep interest rates between 3.5% and 3.75%. Two Fed governors voted against the move and instead backed a rate cut, while 10 officials were in favour of leaving rates the same.
