The central banks of Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and the Sultanate of Oman announced immediate interest rate hikes following a similar decision by the Federal Reserve.
On Wednesday, the Federal Reserve raised the federal funds rate by 75 basis points to a range of 3% to 3.25%, the fifth increase this year.
Gulf central banks continue to raise interest rates in line with their goals of maintaining monetary and financial stability, as well as in light of local and global developments.
The Central Bank of Saudi Arabia has decided to raise the rate on repurchase agreements by 75 basis points from 3.00 to 3.75 percent.
Saudi Arabia also raised its rate on reverse repurchase agreements from 2.50 to 3.25 percent.
Meanwhile, the UAE Central Bank decided to raise the “base rate” on overnight deposits by 75 basis points from 2.4 percent to 3.15 percent.
The UAE Central Bank has decided to keep the rate applicable to borrowing short-term liquidity through all existing credit facilities at 50 basis points above the base rate.
For its part, the Central Bank of Bahrain announced an interest rate hike in light of developments in the international financial markets and as part of the measures it is taking to keep the country’s money markets running smoothly.
The Central Bank of Bahrain raised its base interest rate on weekly deposits to 4 percent from 3.25 percent.
Bahrain also raised the interest rate on overnight deposits to 3.75% and on 4-week deposits to 4.75%.
In addition, the Central Bank of Qatar decided to raise the interest rate by 75 basis points, bringing the lending rate to 4.50%, the repurchase rate (REPO) to 4% and the deposit rate to 3.75%.
In this context, the Central Bank of Kuwait raised its discount rate by a quarter of a percentage point from 2.75 percent to 3 percent effective today, Thursday, and made various rate adjustments to the monetary market intervention rates that currently apply to all periods. interest rate structures.
Earlier Thursday, Omani television reported that the central bank had decided to raise the local bank buyout rate by 75 basis points to 3.75 percent as of today.
The GCC countries peg their currencies to the US dollar, with the exception of Kuwait, which peg its currency to a basket of currencies, including the dollar. Six countries are keeping pace with the US Federal Reserve’s interest rate decisions.
Source: El Iktisad
