UAE Central Bank upholds base interest rate after US Federal Reserve decision
Date
6/13/2024 5:37:12 AM
(MENAFN) On Wednesday, the Central bank of the United Arab Emirates (UAE) announced its decision to keep the "base rate" on overnight deposit facilities steady at 5.40 percent. This decision mirrors the recent stance of the US Federal Reserve, which decided to maintain its interest rate on reserve balances unchanged during its latest meeting.
Additionally, the UAE Central Bank decided to uphold the borrowing rate for short-term liquidity from the central bank through all existing credit facilities, setting it at 50 basis points above the base rate. The base rate, linked to the interest rate on reserve balances approved by the US Federal Reserve, plays a crucial role in shaping the overall monetary policy stance. It also establishes a minimum effective interest rate for overnight money market rates within the country.
This move comes as the US Federal Reserve, for the seventh consecutive time, kept its interest rates unchanged. The rates for the world's largest economy remain within the 5.25 to 5.5 percent range. The alignment between the UAE Central Bank's decision and the US Federal Reserve's policy underscores the interconnectedness of global financial systems and the influence of US monetary policy on other economies.
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