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Central banks in Saudi Arabia, the United Arab Emirates, Kuwait, Qatar and Bahrain have decided to raise interest rates to track increases in the Federal Reserve’s benchmark rate.
The move comes as the Fed raised its benchmark interest rate by 75 basis points on Wednesday to a range of 3%-3.25%, the largest increase since 1994.
The Fed announced a rate hike at the end of its two-day policy meeting on Wednesday, the fifth hike this year and the third in three consecutive quarters. With few signs its actions are working, the Fed has stepped up efforts to cool demand and stem price gains.
The Central Bank of the United Arab Emirates (CBUAE) decided earlier yesterday to increase the base rate applicable to the Overnight Deposit Facility (ODF) by 75 basis points to 3.15% from 2.4% from Thursday 22 September 2022.
The Saudi central bank decided to raise the “repurchase” agreement rate by 75 basis points to 3.75% and the “reverse repurchase” agreement rate by 75 basis points to 3.25%, in line with the bank’s goal of maintaining monetary and financial policy. A statement said, given global developments, stability.
The Central Bank of Bahrain (CBB) has decided to raise the key policy rate on its one-week deposit facility to 4% from 3.25%.
The CBB statement said the move was in light of developments in international financial markets and the ongoing measures the CBB has taken to ensure the smooth functioning of the Bahraini currency market.
The CBB also decided to raise the overnight deposit rate from 3% to 3.75%, the four-week deposit rate from 4% to 4.75%, and the lending rate from 4.5% to 5.25%.
It said the CBB will continue to monitor developments in global and local markets closely for any further action necessary to maintain the kingdom’s monetary and financial stability. – Arab Trade News Agency
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