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Wed, Jan 14, 2026 | Rajab 25, 1447 | Fajr 05:45 | DXB 
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UAE Central Bank maintain benchmark interest rate
The UAE monetary policy follows the US Federal Reserve due to the dirham’s dollar peg
The UAE Central Bank on Wednesday announced that it maintained its benchmark rate.
In a statement, the Central Bank said it was maintaining its Overnight Deposit Facility at 4.4 per cent. The decision was taken after the US Federal Reserve maintained its benchmark rate at 4.25-4.5 per cent.
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The UAE follows US monetary policy as the dirham is pegged to the US dollar.
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The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.
The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.
The US Federal Reserve kept interest rates unchanged for a fifth consecutive policy meeting, defying strong political pressure from President Donald Trump to slash borrowing costs — although divisions emerged among policymakers.
The central bank kept the benchmark lending rate at a range between 4.25 per cent and 4.50 per cent, saying "recent indicators suggest that growth of economic activity moderated in the first half of the year" despite distortions from trade swings as businesses tried to avoid Trump's wide-ranging tariffs
"Uncertainty about the economic outlook remains elevated," as did inflation, the Fed added in a statement at the end of its two-day policy gathering.
The decision came with two rare dissents from Fed Governors Christopher Waller and Michelle Bowman, who had previously signalled openness to a July rate cut.
They preferred to lower rates by 25 basis points instead, the Fed said.
While potential divisions among the Fed's rate-setting committee were expected by financial markets, analysts note this marks the first time since 1993 that there have been dissents by two governors.
The Fed decision comes amid a flurry of data releases this week, including a report showing the world's biggest economy returned to growth in the second quarter.
The GDP data was largely influenced by a pullback in imports after businesses stocked up earlier this year to avoid incoming levies imposed by Trump.
Inputs from AFP
Somshankar Bandyopadhyay
Somshankar Bandyopadhyay is a News Editor with close to three decades of experience. Currently, he manages the business section, ensuring that the top economic and business news of the day reaches its readers.
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