The Central Bank of Bahrain (CBB) said on Wednesday it raised its key policy interest rate on its one-week deposit facility by 75 basis points to 4.75%, following the U.S. Federal Reserve’s fourth straight hike of that size as the Bahraini dinar is pegged to the dollar.
CBB also hiked by 75 bps the overnight deposit rate to 4.5%, the four-week deposit rate to 5.5% and the lending rate to 6%, it said in a statement.
The move by the Bahrain was reflected by banks across the GCC as central banks raised benchmark rates to maintain their currency’s pegs to the US dollar.
The Central Bank of the UAE (CBUAE) has increased the Base Rate from 3.15% to 3.90%, effective immediately. CBUAE also 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.
Meanwhile, in Saudi Arabia the Saudi Central Bank, also known as SAMA, lifted its repo and reverse repo rates by 75 bps to 4.5% and 4%, respectively, it said in a statement.
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