The Central Bank of the UAE (CBUAE) has reduced the Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points, bringing it down from 4.15% to 3.90%, effective Thursday, 30 October.
The move follows the US Federal Reserve’s decision to lower the Interest Rate on Reserve Balances (IORB) by the same margin earlier today. The CBUAE’s monetary policy adjustments typically align with those of the Federal Reserve, given the UAE dirham’s peg to the US dollar.
In a statement, the CBUAE confirmed that the interest rate applicable to borrowing short-term liquidity from the central bank will remain 50 basis points above the new Base Rate across all standing credit facilities.
The Base Rate serves as a key indicator of the central bank’s monetary policy stance and provides an effective floor for overnight money market interest rates in the UAE.
The adjustment aims to maintain monetary stability and support the country’s financial system in line with global economic developments. The decision underscores the CBUAE’s continued commitment to aligning its policies with international benchmarks while safeguarding domestic financial stability.
News Source: Emirates News Agency
