US Federal Reserve hits ‘pause’ on rate hike after 10 increases – UAE consumers, businesses will feel relief

US Federal Reserve hits ‘pause’ on rate hike after 10 increases – UAE consumers, businesses will feel relief

Dubai: UAE consumers and businesses have got a break from paying extra on their loans with the US Federal Reserve not raising the interest at its meeting today (June 14). This puts a pause on rate hikes after 10 increases since March 2022 – and which have been matched by the UAE Central Bank given the dirham’s peg to the dollar. In fact, the Fed had said it would ‘pause’ rate increases after its meeting in May (when it added a further 0.25 per cent increase to the base rate). UAE based businesses had taken the Fed for its word and had been preparing for the pause. Appetite for bank loans remains strong among businesses and consumers, with the financials that will be put out by banks for the second quarter 2023 expected to reflect that. As for UAE consumers, the Fed pause will mean they will not have to find ways to add a few more hundreds of dirhams to their loan exposures (and credit card bills). The next obvious question is when the Fed will make its first cuts to the rates, which are now at 5-5.25 per cent in the US. In a statement, the Central Bank