Gulf central banks raise rates as Fed hikes by 50 bps

Gulf central banks raise rates as Fed hikes by 50 bps

Dubai: Gulf central banks hiked their main interest rates on Wednesday as the US Federal Reserve raised its target policy rate by 50 basis points in the face of inflation at highs not seen in decades. All Gulf countries have their currencies pegged to the US dollar, except Kuwait, which pegs the Kuwaiti dinar to a basket of currencies that includes the dollar. The central banks of Saudi Arabia, the United Arab Emirates, Qatar and Bahrain raised their key rates by 50 bps. The Central Bank of Kuwait said it increased its discount rate by 25 basis points (bps) to 2 per cent, in a move less hawkish than the Fed's. The central banks of the United Arab Emirates and Bahrain both raised their key rates by 50 bps. , which would take it to 2.25 per cent, effective from Thursday. The bank said it would maintain the rate on borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 bps above the base rate. The Saudi Central Bank (SAMA) raised its repo rate and reverse repo rates by 50 bps each to 1.75 per cent and 1.25 per cent, respectively. The Central Bank of Qatar said