UAE Central Bank hikes base rate by 75 bps

UAE Central Bank hikes base rate by 75 bps

The Central Bank of the UAE (CBUAE) has decided to raise the base rate applicable to the Overnight Deposit Facility (ODF) by 75 basis points, effective from Thursday, June 16, 2022. This decision was taken following the US Federal Reserve Board’s announcement to increase the Interest on Reserve Balances (IORB) by 75 basis points. The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate. The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates. . The Central Bank of Bahrain said on Wednesday it raised its key policy interest rate, on its one-week deposit facility, by 75 basis points (bps) to 2.5 per cent, moving in lockstep with the US Federal Reserve's hike as the Bahraini dinar is pegged to the dollar. CBB also hiked by 75 bps the overnight deposit rate to 2.25 per cent, the four-week deposit rate to 3.25 per cent and the lending rate to 3.75 per cent. The Central Bank of