Central Bank Of The United Arab Emirates Maintains Base Rate Unchanged At 3.65% Following Fed Decision

The Central Bank of the United Arab Emirates has announced its decision to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) without change at 3.65%. This strategic monetary policy stance follows the U.S. Federal Reserve's recent announcement to keep the interest rate on reserve balances (IORB) unchanged at its latest meeting held on Wednesday.

In an official statement, the Central Bank further confirmed that it will maintain the interest rate applicable to borrowing short-term liquidity from the Central Bank through all standing credit facilities at 50 basis points above the Base Rate. This alignment underscores the structural link between the UAE’s monetary policy and that of the U.S. Federal Reserve, ensuring stability for the national currency and the broader financial system.

The Base Rate serves as the primary anchor for the UAE's monetary policy, providing an effective floor for overnight money market interest rates across the nation. By maintaining the status quo, the Central Bank aims to preserve financial stability and provide a predictable interest rate environment for both institutional and retail banking sectors within the local market.