The Central Bank of the UAE (CBUAE) has kept the Base Rate on its Overnight Deposit Facility (ODF) at 3.9%, following the US Federal Reserve’s decision to hold its Interest Rate on Reserve Balances (IORB) steady.
The move was announced on October 29, shortly after the Federal Reserve confirmed it would leave its benchmark unchanged. The UAE’s decision follows a familiar pattern, as the central bank tracks US policy closely.
The CBUAE also maintained the rate for borrowing short-term liquidity from the bank. It remains at 50 basis points above the Base Rate for all standing credit facilities, so the cost of accessing emergency funding stays the same for lenders.
The alignment is by design. The Base Rate is anchored to the Federal Reserve’s IORB, which reflects the dirham’s peg to the US dollar. It signals the overall stance of UAE monetary policy and serves as an effective floor for overnight money market rates across the country.
For banks, businesses and borrowers, the practical effect is stability. Rates tied to the Base Rate, including many loan and mortgage benchmarks, are unlikely to shift in the short term. That gives companies and households a clearer view when planning borrowing, investment and expansion.
The decision reinforces the central bank’s cautious approach, with the UAE continuing to move in step with the Federal Reserve as global monetary conditions develop.
News Source: Emirates News Agency
