The Central Bank of the UAE (CBUAE) will maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 4.4 per cent.
This decision was taken following the US Federal Reserve’s announcement to keep the Interest Rate on Reserve Balances (IORB) unchanged.
The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity at 50 basis points above the Base Rate for all standing credit facilities.
The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.
Meanwhile, in the US, Federal Reserve Chair Jerome Powell refused to bow down to President Donald Trump’s demands for a cut in interest rates. The Fed left its key short-term interest rate unchanged for the fifth time this year, at about 4.3 per cent.
Powell also gave no indication of an upcoming rate cut in September, saying: “We have made no decisions about September,” he said, acknowledging that if the Fed cut its rate too soon, inflation could move higher, and if it cut too late, then the job market could suffer.
Major US stock indexes, which had been trading slightly higher on Wednesday, dipped after Powell’s comments.
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