UAE Central Bank raises interest rate

The Central Bank of the UAE has raised its benchmark interest rate by 75 basis points, in line with the US Federal Reserve's increase of three-quarters of a per cent.

The US move, the third rise in three months, is designed to control rampant inflation.

Countries around the world are experiencing sharp price rises, fuelled by increasing energy costs, although the UAE inflation rate remains relatively in check, according to the Central Bank

The CBUAE also decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate.

The Base Rate, which is anchored to the US Federal Reserve’s interest on reserve balances, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.