The Central Bank of the UAE has lowered its Base Rate on the Overnight Deposit Facility to 3.65 percent, marking a 25 basis point cut that aligns the country’s monetary stance with the latest decision by the US Federal Reserve.
The adjustment takes effect on Thursday, 11 December. The move follows the Federal Reserve’s announcement to reduce the Interest Rate on Reserve Balances by the same margin, a shift that typically guides policy changes in countries whose currencies are closely linked to the US dollar.
The Central Bank confirmed that interest rates for borrowing short term liquidity will remain unchanged. These will continue to be set at 50 basis points above the Base Rate across all standing credit facilities, preserving the existing cost structure for banks seeking immediate funding.
The Base Rate is anchored to the Federal Reserve’s rate on reserve balances and acts as a key indicator of the UAE’s monetary policy direction. It also provides an important floor for overnight money market rates, influencing lending conditions and liquidity management throughout the banking sector.
The decision signals the UAE’s ongoing alignment with global monetary shifts while aiming to support stable financial conditions in the domestic market.
News Source: Emirates News Agency
