UAE c. bank cuts base rate following US Fed’s decision

The Central Bank of the UAE (CBUAE) has reduced the Base Rate for the Overnight Deposit Facility (ODF) by 25 basis points to 4.40 per cent, effective Thursday, 19 December. The move comes in response to the US Federal Reserve’s decision to lower its Interest Rate on Reserve Balances (IORB) by 25 basis points.

Despite the rate cut, the CBUAE will maintain the interest rate for short-term liquidity borrowing at 50 basis points above the Base Rate across all standing credit facilities.

The Base Rate, linked to the Federal Reserve’s IORB, reflects the UAE’s monetary policy direction and establishes a floor for overnight money market rates in the country. The adjustment aligns with global financial trends and supports liquidity management in the UAE’s banking sector.

Attribution: CBUAE

Subediting: M. S. Salama