UAE Central Bank Reduces Base Rate to 4.15% in Response to Federal Reserve's Move
The Central Bank of the United Arab Emirates (CBUAE) has announced a lowering of its Base Rate on the Overnight Deposit Facility (ODF) by 25 basis points, bringing it down to 4.15%. This decision was made by the monetary policy committee of the CBUAE, aiming to maintain confidence in the dirham's stability amid shifting global economic conditions.
The Base Rate serves as a key indicator of the CBUAE's monetary policy stance, acting as the effective floor for overnight money market rates in the UAE. The change was effective on Thursday, 18 September.
The move by the CBUAE was in line with the US Federal Reserve's decision to cut the Interest Rate on Reserve Balances (IORB) by the same margin. The UAE dirham is pegged to the US dollar, and the CBUAE typically mirrors changes in US monetary policy to maintain currency stability.
The rate on short-term borrowing through the CBUAE's standing credit facilities will remain 50 basis points above the new Base Rate. The Base Rate on short-term borrowing through the CBUAE's standing credit facilities remains 50 basis points above the new Base Rate.
The CBUAE's decision to lower the Base Rate aims to ensure consistency in financial markets. The Base Rate in the UAE is directly tied to the Fed's IORB, and the move to align with the Fed's rate cut is intended to maintain the UAE's economic ties with the US.
The CBUAE's action is significant as it demonstrates the bank's commitment to maintaining the dirham's stability in the face of global economic uncertainty. The specific names of the individuals involved in this decision are not specified in the available sources. However, the decision underscores the bank's focus on maintaining the UAE's economic health and its reputation as a reliable financial hub.
Read also:
- Shaping India's Economic Progression: Readying the Financial System for Tomorrow
- Conflict between Ben & Jerry's co-founder and Unilever over Gaza issues leads to resignation of co-founder
- Two farmers in Zambia take legal action against two firms with Chinese connections, alleging an ecological disaster caused by their operations.
- Deepening EU-India relations despite apprehensions regarding Moscow connections
