The Central Bank of the UAE (CBUAE) decided to hold interest rates for bank lending at the current level of 50 basis points above the base rate for all credit facilities.
The bank has also decided to maintain the status quo on the base rate applicable to the Overnight Deposit Facility (ODF) at the prevailing 5.40 percent.
The UAE apex bank’s decision on lending and base rates followed the US Federal Reserve’s announcement on Wednesday, January 31, to keep the interest rates unchanged.
The UAE bank’s base rate, anchored to the US Federal Reserve’s interest on reserve balances (IORB), signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the country.
In line with the wide market expectation, the US Fed held its key interest rate steady earlier Wednesday and opened the door to rate cuts but hinted that a March move is probably a long shot despite rapidly slowing inflation.
“In considering any adjustments to the target range for the federal funds rate, the (Fed) will carefully assess incoming data, the evolving outlook and the balance of risks,” the central bank said.
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