US Federal Reserve raises interest rates by 0.25% again; UAE, other Gulf central banks follow

US Federal Reserve raises interest rates by 0.25% again; UAE, other Gulf central banks follow

Dubai: The US Federal Reserve went ahead with its second interest rate hike of 2023, by another 0.25 per cent, and it was soon reflected on lending rates in the UAE and other Gulf markets. This is now the ninth rate increase by the Fed since March 2022 as global economies try to slow down inflationary gains. Until about 48 hours ago, there were some who believed that the Fed would avoid a rate increase this month given the shake up the global banking sector has been through after the troubles at Silicon Valley Bank and the subsequent turmoil at Credit Suisse. But the forceful intervention by the other Swiss bank UBS, which bought Credit Suisse last Sunday (March 19), and coordinated actions by central banks managed to hold off further alarms. Qatar became the first of the Gulf economies to match the US rate hike - raising the key lending rate to 5.5 per cent. Bahrain joined in, and from tomorrow, the key rate will be 5.75 per cent. Saudi Arabia's central bank too opted for a hike, taking the lending rate to 5.5 per cent. The UAE Central Bank, too, hiked its rate by 25 basis points. "The