UAE Central Bank follows Fed move to hike interest rates by 0.5%

The Central Bank of the UAE (CBUAE) has decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points – from 3.9% to 4.4%, effective from Thursday, 15 December 2022.

This decision was taken following the US Federal Reserve Board’s announcement on December 14, 2022 to increase the Interest on Reserve Balances (IORB) by 50 basis points.

The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate.

The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.

• GCC to grow at double the rate of global economy despite slowdown in 2023