Following US Fed .. UAE and Qatar kuup interest rates unchanged

The UAE Central Bank and the Qatar Central Bank decided today, Wednesday, to stabilize interest rates in line with the decision of the Federal Reserve – the central bank in America – to keep the current range of interest rates unchanged for the seventh time in a row.

The Federal Reserve kept interest rates at a range of 5.25%-5.5%, their highest level in 23 years, in line with market expectations.

The UAE Central Bank decided to keep the base rate on overnight deposit facilities unchanged at 5.40%.

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.

In the same vein, the Qatar Central Bank fixed interest rates at their current levels, at 6.25% on lending, and 5.75% on deposits.

The Qatari Central Bank’s decision to stabilize interest rates, for the seventh time in a row, is in line with the decision of its US Federal counterpart, which has been following tight monetary policies since the first quarter of 2022 to contain high inflation rates in the United States of America.

According to official data, the inflation rate in Qatar slowed last April to the level of 0.71%, recording the lowest level in 37 months, while the broad money supply M2 declined to the level of 736 billion riyals.

The Gulf Cooperation Council countries peg their currencies to the US dollar, with the exception of Kuwait, which pegs its currency to a basket of currencies, including the dollar. The Gulf countries continue to keep pace with the US Federal Reserve’s decisions regarding interest rates.