GCC central banks raise rates by 75bps after US fed move to thwart inflation

GCC central banks raise rates by 75bps after US fed move to thwart inflation

The Federal Open Market Committee (FOMC) has hiked its key interest rates by 75 basis points (bps) on Wednesday, to fight soaring inflation. Many GCC economies also matched the rate hike by increasing the lending 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 bps, effective from Thursday, 28 July 2022. Similarly, Kuwait, Bahrain and Qatar also hiked lending rates.

"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 rate," the apex bank said in a statement.

The Central Bank of Bahrain's key policy interest rate on the one-week deposit facility is raised from 2.50% to 3.25%. "The CBB has also decided to raise the overnight deposit rate from 2.25% to 3.00%, the four-week deposit rate from 3.25% to 4.00% and the lending rates from 3.75% to 4.50%," according to a