What will impact UAE consumers more: Rising interest rates or higher prices due to inflation? – Arabian Business

What will impact UAE consumers more: Rising interest rates or higher prices due to inflation? – Arabian Business

The UAE Central Bank has raised interest rates, following the US Federal Reserve’s decision to increased the interest on reserve balances (IORB) by 50 basis points for the first time in over two decades.

The US Federal Reserve’s “aggressive rate hike decision” is in line with efforts to stop the economy from overheating and reduce inflation that is running at its highest levels in four decades, experts said told Arabian Business.

“The Fed rate hike will be reflected on all loans and mortgages. A half a basis point hike may not immediately deter consumers from borrowing less as it would have only a marginal impact on their interest payments,” Vijay Valecha, the chief investment officer at Century Financial explained.