Following the Fed’s lead, Gulf central banks hold interest rates steady

The Central Bank of the UAE announced on Wednesday that it would maintain its key interest rate at 4.40%.

This decision follows the Federal Reserve’s announcement that it would keep the interest rate on reserve balances unchanged at its meeting held on Wednesday.

The Central Bank also decided to maintain the rate applicable to borrowing short-term liquidity from the Central Bank through all existing credit facilities at 50 basis points above the base rate.

The base rate, which is linked to the interest rate on reserve balances approved by the US Federal Reserve, determines the overall stance of monetary policy and provides a floor for the effective interest rate for overnight money market rates in the country.

For its part, the Qatar Central Bank decided today to maintain the current interest rates for deposits, lending, and repo rates, following an assessment of Qatar’s current monetary policy. Qatar Central Bank (QCB), in a post on its official account on the X platform, confirmed that it would maintain the deposit rate (QCBDR) at 4.60% and the lending rate (QCBLR) at 5.10%. The repurchase rate (QCB Repo Rate) was also maintained at 4.85%.