Qatar, GCC central banks mirror US Federal Reserve’s rate hike

Qatar, GCC central banks mirror US Federal Reserve’s rate hike

Mirroring the move by the US Federal Reserve (Fed) Qatar and other GCC central banks have all raised rates by 25bps or 0.25%.

On Wednesday, Qatar Central Bank raised the QCB deposit rate (QCBDR) by 25 basis points, to 5.75%.

QCB also decided to raise the banks’ lending interest rate (QCBLR) by 25 basis points, to become 6.25%, and the repurchase rate (QCB Repo Rate) by 25 basis points, to become 6%

The revised rates took effect on July 27, QCB said.

According to Oxford Economics, this is likely to be the final hike of this cycle, given that inflation has peaked and economies are slowing rapidly.

“We still think the Fed will start cutting rates next year, encouraging banks across the GCC to ease policy rates,” Oxford Economics said in its weekly briefing on Thursday.

“We expect the hike to be last of this cycle but think the Fed will stay committed to its data-dependent approach.

“The Fed will likely start cutting rates next year, which will allow the GCC central banks to begin easing policy. Still, rates will likely only come down gradually, which will drag non-oil GDP growth in the region down to 3.9% in 2024, from 4.4% this year,” Oxford Economics noted.

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