Central banks in the Arabian Gulf have raised their interest rates, following a similar hike by the US Federal Reserve on Wednesday.
The UAE, Saudi Arabia, Bahrain, Kuwait, and Qatar made the move after the US Fed increased its key interest rate by 75 basis points for the fifth time this year amid skyrocketing inflation.
Most Gulf central banks follow the US Fed because their currencies are pegged to the US dollar.
Although inflation in the region is relatively lower than in other parts of the world, the Central Bank of the UAE raised its benchmark base rate for overnight deposit by three-quarters of a percentage point to 3.15 percent.
In Saudi Arabia, the regulator raised its repurchase agreement (repo) rate by three-quarters of a percentage point to 3.75 percent and its reserve repo rate by a similar margin to 3.25 percent.
Kuwait’s central bank raised its discount rate to 3 percent, while Bahrain’s raise its key rate on one-week deposits to 4 percent.
In Qatar, the central bank raised the repo rate to 4 percent, while also increasing deposit rate to 3.75 percent, and the lending rate to 4.5 percent.
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