The Central Bank of the United Arab Emirates has announced a 25-basis-point increase to its Base Rate for the Overnight Deposit Facility, bringing the new rate to 3.90 percent. This adjustment follows a similar quarter-point hike implemented by the United States Federal Reserve. The UAE maintains a fixed exchange rate between the dirham and the US dollar, necessitating that local monetary policy remains synchronized with American interest rate trends to ensure financial stability. Financial experts noted that this decision was widely anticipated by market participants. The Base Rate serves as a critical anchor for overnight money-market rates and influences the Emirates Interbank Offered Rate, which dictates the cost of borrowing for various local financial products. This policy alignment remains a cornerstone of the nation's strategy to preserve currency competitiveness and economic consistency.
Source : Khaleej Times
Photo : Khaleej Times
