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17 April 2024

Eibor eases after central bank reduces its benchmark rates

The central bank has also cut its benchmark overnight repurchase rate to one per cent. (MAGDY ISKANDAR)

By Reuters

The three-month Emirates Interbank Offered Rate (Eibor) yesterday eased after the central bank cut its benchmark interest rates on Monday.

Eibor, the rate at which banks lend to each other, eased by about 10 basis points to 3.83125 per cent yesterday.

The UAE central bank also cut its benchmark overnight repurchase rate on Monday to one per cent from 1.5 per cent. The UAE central bank has started publishing rates for the two-week to one-month repo, and the two- to three-month repo.

It said yesterday the two-week rate was 1.25 per cent and the two-month rate 1.5 per cent.

Saudi Arabian interbank rates eased for a third day yesterday after the central bank of the world's top oil exporter cut its benchmark interest rate for the fifth time since October.

The three-month Saudi Interbank Offered Rate fell to 1.34 per cent from 1.355 per cent on Tuesday.

Interbank rates have fallen almost 50 basis points since Monday, when the Saudi Arabian Monetary Agency (Sama) reduced its repurchase rate by 50 basis points to two per cent, while halving its reverse repurchase rate to 0.75 per cent. The central bank said the rate cuts were designed to ensure that banks are able to extend cheap credit to meet demand among customers.