UAE, Saudi Arabia, Bahrain Kuwait Raise Rates After US Federal Reserve Decision
The Fed decided to raise interest rates for the 1st time in nearly a decade yesterday Gulf states followed
Four Gulf States (GCC) have raised their interest rates following a historic decision by the United States Federal Reserve.
The organisation increased interest rates for the 1st time in 9 years Wednesday in the belief that the US economy had largely recovered from the Y’s 2007 to 2009 financial crisis.
It was reported that the UAE central bank raised interest rates Thursday on its certificates for deposits by 25 bpts.
Certificates of deposit are the monetary policy instrument used by the UAE central bank through which changes in interest rates are transmitted, the newswire said.
Other central banks in Saudi Arabia, Kuwait and Bahrain made similar moves.
Saudi Arabia’s central bank raised its benchmark reverse repurchase rate by 25 to 50 bpts, state news agency SPA reported.
Meanwhile, Bahrain’s central bank said it had decided to raise its Key policy interest rate to 0.50% from 0.25%. The rate on its 1-week deposit facility was raised to 0.75% from 0.50%. The central bank said it was keeping its repo and lending rates at 2.25%.
Kuwait’s central bank raised its discount rate by 0.25% to 2.25%, state news agency KUNA reported.
The central bank governor reportedly said the decision to raise rates was to guarantee the currency’s competitiveness and attractiveness.
By Robert Anderson
Paul Ebeling, Editor
HeffX-LTN
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