The Central Bank of the UAE (CBUAE) has lowered its Base Rate on the Overnight Deposit Facility (ODF) by 25 basis points to 4.15%, effective Thursday, 18 September.
The move comes in line with the US Federal Reserve’s decision to cut the Interest Rate on Reserve Balances (IORB) by the same margin earlier in the day. As the UAE dirham is pegged to the US dollar, the CBUAE typically mirrors changes in US monetary policy to maintain currency stability.
In addition to the Base Rate adjustment, the CBUAE confirmed that the rate on short-term borrowing through its standing credit facilities will remain 50 basis points above the new Base Rate.
The Base Rate, tied directly to the Fed’s IORB, serves as a key indicator of the central bank’s monetary policy stance and acts as the effective floor for overnight money market rates in the UAE.
By aligning with the Fed’s rate cut, the CBUAE aims to ensure consistency in financial markets and maintain confidence in the dirham’s stability amid shifting global economic conditions.
News Source: Emirates News Agency
