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UAE loans to remain stable as central bank holds rates
Market watchers believe the US central bank has adopted a wait and watch stand to see the effects of the Iran conflict on inflation, currently standing at 2.4 per cent
- PUBLISHED: Wed 18 Mar 2026, 10:06 PM UPDATED: Wed 18 Mar 2026, 10:35 PM
Loans and mortgages in the UAE are set to continue on a stable path, as the UAE Cenrtal Bank on Wednesday decided to keep rates unchanged.
In a statement, the apex bank said it had decided to maintain the base rate applicable to the overnight deposit facility at 3.65 per cent, the same as last month.
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The decision follows the move by the US Federal Reserve, which decided to maintain its benchmark federal funds target rate range between 3.5 per cent and 3.75 per cent.
The UAE follows US monetary policy as the UAE dirham is pegged to the US dollar.
Market watchers believe the US central bank has adopted a wait and watch stand to see the effects of the Iran conflict on inflation, currently standing at 2.4 per cent, which is comfortably within range of the Fed’s two per cent target.
“The challenge for the Fed is that inflation has stopped falling as quickly as anticipated. The latest CPI data shows US inflation holding at 2.4% year‑on‑year, still above the Fed’s 2% target. Meanwhile, consumer inflation expectations remain anchored at around 3%, and wage and labour‑market sentiment has softened, with the New York Fed survey highlighting rising job insecurity. Geopolitics is now the major swing factor. Oil has surged toward $95–100 per barrel following Iran‑related disruptions, feeding through to gasoline and transportation costs,” said Hamza Dweik, Head of Trading MENA, Saxo Bank.
“With the Iran–Israel conflict now into its third week and disruptions in the Strait of Hormuz putting as much as 10 million barrels per day of Gulf supply at risk, inflation risks are clearly being driven by geopolitics, not just domestic data. Powell’s tone reflected that balance — acknowledging energy-driven inflation pressures while maintaining that policy remains “well-positioned.” For investors, this reinforces that we are in unconventional times where policy lags real-world shocks. For investors, this reinforces the need to stay flexible, focus on short-term opportunities, and maintain liquidity — because in this cycle, the ability to move quickly matters more than long-term positioning,” said Madhur Kakkar, Founder & CEO, Elevate Financial Services
Associate Editor Somshankar Bandyopadhyay brings more than three decades of experience to the KT newsroom. Currently, he manages the news production of the business section, ensuring that the top economic and business news of the day reaches its readers.