The Central Bank of the United Arab Emirates (CBUAE) has announced a reduction in its Base Rate by 50 basis points, effective from September 19.
The rate, which applies to the Overnight Deposit Facility (ODF), has been lowered from 5.40 to 4.90 per cent.
This decision follows the US Federal Reserve’s move to decrease the Interest Rate on Reserve Balances (IORB) by 50 basis points.
“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,” WAM said in a statement.
This adjustment is expected to influence the country’s monetary landscape, potentially affecting borrowing costs and economic activity in the Emirates.
The move aligns the country’s monetary policy with that of the United States, reflecting the dirham’s peg to the US dollar and the interconnected nature of global financial systems.
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