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UAE Residents Feel Relieved After CBUAE Pauses Rate Hike

  • Publish date: Thursday، 15 June 2023
UAE Residents Feel Relieved After CBUAE Pauses Rate Hike

The Overnight Deposit Facility (ODF) Base Rate would remain unchanged at 5.15 percent as of Thursday, June 15th, 2023, according to the Central Bank of the UAE (CBUAE).

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The CBUAE has also decided to maintain all standing credit facilities' applicable rates at 50 basis points over the Base Rate for short-term liquidity borrowing from the CBUAE.

The Fed maintained its range of 5% to 5.25 percent last month after raising its benchmark rate for ten months in a row. The Base Rate, which is tied to the IORB of the US Federal Reserve, conveys the overall direction of the CBUAE's monetary policy. Additionally, it gives the UAE's overnight money market rates a practical interest rate floor.

The Overnight Deposit Facility (ODF) base rate will remain at 5.15 percent, according to a statement from the Central Bank of the UAE. 

Rates were increased by a total of 500 basis points by the Fed during the past 15 months, which is the highest level since 2007, just before the commencement of the global financial crisis in 2008. It is currently taking a break to evaluate the impact of the tightening cycle on the economy.

After prices reached a four-decade high of 9.1% in June of last year, the US central bank quickly boosted rates to bring inflation back to its goal range of 2%.

Due to their currencies being anchored to the US dollar, the GCC's central banks generally follow the Fed's policy rate decisions, with Kuwait being the only exception among the six members of the economic bloc because its dinar is linked to a range of currencies.

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