UAE Base Rate Rises as US Fed Raises Interest Rates
The Central Bank of the UAE (CBUAE) raised its UAE Base Rate by 25 basis points to 3.9% on September 17, 2026. The move followed a similar rate increase by the US Federal Reserve.
The CBUAE increased the rate from 3.65% to 3.9%. The new rate took effect on Thursday. The UAE central bank’s Base Rate is linked to the US Federal Reserve’s Interest on Reserve Balances (IORB).
The decision came after the US Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75% to 4%. The move marked the Fed’s first rate increase since 2023.
The UAE rate change can affect borrowing costs for residents and businesses. Loans and mortgages linked to variable interest rates may become more expensive following the increase. However, higher interest rates can also provide better returns on some savings products, depending on individual bank rates and account terms.
The CBUAE also said it will maintain the interest rate for borrowing short-term liquidity through its standing credit facilities at 50 basis points above the Base Rate.
The latest decision keeps UAE monetary policy closely aligned with US interest-rate movements. This relationship reflects the UAE dirham’s dollar peg and the central bank’s approach to maintaining monetary and financial stability.
