The UAE Central Bank on Wednesday decided to maintain the base rate applicable to the overnight deposit facility (ODF) at 4.40 per cent.

The UAE's decision follows that of the US Federal Reserve, which decided to hold its interest rates. The UAE follows US monetary policy as the UAE dirham is pegged to the US dollar.

Earlier, the US Federal Reserve held its interest rates, as the US central bank continued to pause as officials say they want a clearer picture of the US economy's direction before deciding their next interest rate move.

The fed funds rate has been at 4.25 per cent-4.50 per cent since the central bank last eased in December, by a quarter percentage point.

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With the labour market weakening, the Fed changed course in September 2024 when it cut the federal funds rate by 50 basis points to a range of 4.75 per cent to 5.00 per cent. The Fed then cut rates by 25 basis points in each of the next two months, before choosing to maintain a range of 4.25 per cent to 4.50 per cent in January 2025.

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