Dubai: The central banks in the Gulf Cooperation Council (GCC) have hiked the base interest rate by 0.75%. The decision was taken as the US Federal Reserve on Wednesday hiked the interest rate by 75 basis points or 0.75%. This is the fourth US Fed increase in policy rate this year.
The Central Bank of the UAE has raised the base rate applicable to the overnight deposit facility by 0.75% from 28, July. The CBUAE maintained the interest rate applicable to borrowing short-term liquidity through all standing credit facilities at 50bps above the base rate.
Kuwait was the first Gulf central bank to hike the base rate by 0.75%. Saudi central bank (Sama) also decided to raise the repurchase agreement (Repo) rate by 75 basis points to 3% from 2.25%. It also increased the reverse repurchase agreement (reverse repo) rate to 2.5% from 1.75%.
The Central Bank of Qatar raised its main deposit rate by 75bps to 3% while the repo rate was raised to 3.25%. It also hiked the lending rate by 50bps to 3.75%.
Bahrain’s central bank also hiked the interest rates by 0.75% with effect from July 28,2022.