Gulf central banks raise interest rates as Fed presses on – The National

Gulf central banks raise interest rates as Fed presses on – The National

The central banks of the UAE, Saudi Arabia, Bahrain and Qatar raised their benchmark borrowing rates after the US Federal Reserve increased its key interest rate to tame inflation and restore price stability.

The Fed bumped up the policy rate for a third consecutive time this year by 25 basis points (bps) as the labour market remains tight, the unemployment rate is at a multi-decade low and the central bank continues to try to bring inflation down to its target range of 2 per cent after prices hit a four-decade last year.

The move comes at a time of mounting concern about the stability of the regional banking sector in the US, the world's largest economy, after recent failures of four lenders.