Dubai: The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) without change at 5.40%. 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 CBUAE took this decision as US Federal Reserve has decided to keep the Interest on Reserve Balances (IORB) unchanged. The Base Rate of CBUAE is anchored to the US Federal Reserve’s IORB. It provides an effective interest rate floor for overnight money market rates in the UAE.
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The US Federal Reserve held its key interest rate steady and opened the door to rate cuts but hinted that a March move is probably a long shot despite rapidly slowing inflation.
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