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Dec 15 (Reuters) – Most equities in the Gulf region fell early on Thursday after Federal Reserve Chairman Jerome Powell said the central bank would raise interest rates further next year.
the fed hawkish stance There is a risk of tipping the economy into recession, but Powell said the U.S. central bank will pay a higher price if it does not tighten its grip on inflation.
Most GCC countries, including Saudi Arabia, the United Arab Emirates and Qatar, have their currencies pegged to the dollar and closely monitor the Fed’s policy moves, exposing the region to the immediate impact of monetary tightening in the world’s largest economy.
Saudi Arabia’s Benchmark Index (.one) It fell as much as 0.6 percent, on track for losses after two straight sessions of gains.
The Fed raised its benchmark overnight interest rate by half a percentage point and forecast it would continue to rise above 5% in 2023, the highest level since the sharp economic downturn in 2007.
The Saudi Central Bank said on Wednesday Increase With the Saudi riyal pegged to the U.S. dollar, its key interest rate was cut by 50 basis points following the Fed’s move.
Real Estate Urban Development Corporation (4322.SE)However, shares rose 2.4 percent after signing a villa development agreement with Roshn Real Estate.
Dubai main stock index (.DFMGI) fell 0.2%, hit by a 2% drop in blue-chip developer Emaar Properties (EMAR. YOU).
The central bank of the United Arab Emirates also raised its benchmark interest rate by 50 basis points to 4.4%, effective Thursday, mirroring the Fed’s move.
In Abu Dhabi, the index (.FTFADGI)However, the stock rose 0.5%, on track to extend gains from the previous session and snap a seven-day losing streak.
Qatar Benchmark Index (.QSI) Petrochemical maker Industries Qatar down 0.7% (IQCD.QA) down 2.1%.
Oil prices, the main catalyst for financial markets in the Gulf region, fell in Asia as the dollar strengthened, while the prospect of a rate hike stoked demand concerns.
Reporting by Ateeq Shariff in Bengaluru; Editing by Vinay Dwivedi
Our standards: Thomson Reuters Trust Principles.
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