SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  

SAMA among Gulf central banks to mirror US Fed 25 bps interest rate hike  

RIYADH: The Saudi Central Bank has increased its interest rate by 25 basis points to 5.25 percent, echoing Wednesday’s move by the US Federal Reserve to curb inflation. A statement from the bank, also known as SAMA, noted its Reverse Repo rate has also increased to 4.75 percent. Inflation is on the rise in the Kingdom, with the annual rate rising to 3.3 percent in December, up from 2.9 percent in November. The Fed’s quarter-point interest rate hike follows months of larger increases, as it hiked 50 basis points in December, and 75 basis points in November, September, July and June. Despite recent signs of a slow down in the US economy, prices are running at their highest level since the early 1980s. While the US Central Bank’s decision was driven by its desire to lower high inflation, this played a part in driving the Gulf region’s monetary policy, as most of the region’s currencies are pegged to the dollar. Following the US Fed’s decision, regional central banks also swung into action to raise their interest rates – although Qatar chose to hold. The UAE's central bank increased its base rate to 4.65 percent, effective on Thursday, while the Central