The Central Bank of the UAE has kept its Base Rate unchanged at 3.65%, reinforcing policy stability after the US Federal Reserve opted to hold its key interest rate steady.
The decision applies to the Base Rate for the Overnight Deposit Facility and follows the Federal Reserve’s announcement to maintain the Interest Rate on Reserve Balances. As the UAE dirham is pegged to the US dollar, the Central Bank typically aligns its monetary policy moves with those of the Federal Reserve.
In addition to holding the Base Rate, the Central Bank confirmed it will continue to apply an interest rate 50 basis points above the Base Rate for borrowing short-term liquidity through all standing credit facilities. This framework governs how banks access overnight and short-term funding from the Central Bank.
The Base Rate serves as a key benchmark for the UAE’s monetary policy stance. Anchored to the Federal Reserve’s Interest Rate on Reserve Balances, it provides an effective floor for overnight money market interest rates across the country.
By maintaining current rates, the Central Bank signals continuity in its monetary approach amid ongoing global economic uncertainty. The move supports financial stability while allowing banks and businesses to plan with greater confidence around borrowing costs.
The decision comes as markets closely monitor central bank actions worldwide for clues on the future direction of interest rates, inflation control, and economic growth.
News Source: Emirates News Agency
