Bahrain, Gulf central banks, raise interest rates after Fed’s move | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

Bahrain, Gulf central banks, raise interest rates after Fed’s move | THE DAILY TRIBUNE | KINGDOM OF BAHRAIN

TDT | Manama

The Daily Tribune – www.newsofbahrain.com

Bahrain and most of its Gulf Cooperation Council neighbours yesterday raised their key interest rates after the Federal Reserve raised its key policy rate by three-quarters of a percentage point for the fourth straight time.

While the US central bank's policy decision was motivated by its desire to lower stubbornly high inflation in the United States, it also will guide Gulf monetary policy as most of the regional currencies are pegged to the dollar.

The Federal Reserve raised interest rates as it continued to battle the worst outbreak of inflation in 40 years but signalled future increases could be in smaller steps to account for the "cumulative tightening of monetary policy" it has enacted so far.

Fed Chair Jerome Powell said that change in pace could come as soon as the central bank's next meeting in December, but he also cautioned that there remains extensive uncertainty about how high rates will need to go and they could well end up being higher than policymakers had estimated at their last meeting in September.

Bahrain raises rate by 75 basis pts

Bahrain raised its main rate by 75 basis points, as Saudi Arabia and the United Arab Emirates, the region's two