US Federal Reserve raises interest rate by another 0.75% – UAE responds with similar move

US Federal Reserve raises interest rate by another 0.75% – UAE responds with similar move

Dubai: The US Fed has decided to stick with a second successive 0.75 per cent hike rather than go with the 1 per cent that some had been expecting. The UAE has matched the US hike, raising its base lending rate by 0.75 per cent. The rate hikes will continue to keep happening through the rest of the year as the US and global economies try to take on inflation. But consumers everywhere will be facing the issue of higher costs on loans and more as part of this painful inflation-busting exercise. In the UAE, consumers with outstanding loans – whether for a car, home or personal needs – will have to start shelling out more on their EMIs, provided they are not on a fixed rate scheme currently. The UAE has typically matched US rate moves, given the dirham's dollar peg through the decades. The next Fed rate hike will likely come about in September. Kuwait has become the first Gulf central bank to hike in unison with the US move, matching the 0.75 per cent. Saudi Arabia too has taken the same course, with the new lending rates coming into effect on July 28 for consumers and businesses.