UAE Central Bank follows Fed decision, holds rates at 5.4%

Inflation objective remains distant, US Federal Reserve says

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Wam

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Photo: File
Photo: File

Published: Wed 1 May 2024, 10:06 PM

Last updated: Wed 1 May 2024, 10:39 PM

The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 5.40%.

This decision was taken following the US Federal Reserve’s announcement on Wednesday to keep the Interest Rate on Reserve Balances (IORB) unchanged.


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.

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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.

Earlier, the US Federal Reserve held its benchmark overnight interest rate as the US central bank believed that in recent months, there has been a lack of further progress toward its 2 percent inflation objective.



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