UAE Central Bank Follows Fed, Maintains Interest Rates

UAE Central Bank Follows US Federal Reserve’s Lead, Keeps Overnight Deposit Rate at 4.4%

The UAE Central Bank decided to go to follow the Federal Reserve’s lead and keep the base rate for its overnight deposit facility at 4.4%. The UAE’s close alignment with US monetary policy is reflected in this decision, as the dirham is pegged to the US dollar.

After three consecutive interest rate cuts, the Federal Reserve decided to keep rates unchanged. The US Federal Reserve announced a target range for its key interest rate of 4.25% to 4.5%, indicating that monetary policy will remain accommodative.

By implementing this decision, the UAE Central Bank is ensuring that the UAE’s monetary policy is consistent with the broader US economic outlook, and therefore supports the stability of the dirham.