‎GCC banks raise interest rates after Fed hike

‎GCC banks raise interest rates after Fed hike

The central banks of Saudi Arabia, the UAE, Kuwait, Qatar and Bahrain hiked their benchmark interest rates following suit of the US Federal Reserve, which decided on May 4 to raise its key rate by 50 basis points (bps).

The Saudi Central Bank (SAMA) decided to lift its reverse repo rate from 75 bps to 125 bps and the repo rate to 175 bps from 125 bps.

The Central Bank of the UAE (CBUAE) also increased its base rate for the overnight deposit facility (ODF) by 50 bps, effective from today, May 5.

The CBUAE maintained the rate applicable to borrowing short-term liquidity from the regulator through all standing credit facilities at 50 bps above the base rate.

The Central Bank of Kuwait (CBK) also hikes its discount rate by 25 bps to 2% from 1.75%, effective from today.

CBK governor Basel Al-Haroon said the decision reflects the regulator's "vigilant monitoring of domestic and international economic and geopolitical developments that resulted in all-time high global inflation rates, mainly driven by increased commodity and energy prices and continuous supply chain disruptions, which constitute a key source of imported inflation."

Qatar Central Bank (QCB) raised its repo rate by 50 bps to 1.75%. It also increased its deposit