UAE, Bahrain follow US move to raise interest rates

The United Arab Emirates central bank said on Wednesday that it was raising interest rates on certificates of deposit in line with the increase in U.S. dollar rates, after the US Federal Reserve Board’s decision to hike rates by 25 basis points.

The UAE central bank said its repo rate for borrowing short-term liquidity had also been increased by 25 bps.

Bahrain’s central bank also said it had decided to raise its one-week deposit facility to 2.75 per cent from 2.5 per cent.

It also increased the overnight deposit rate to 2.5 per cent from 2.25 per cent, and the lending rate to 4.5 per cent from 4.25 per cent. But the one-month deposit rate was kept the same at 3.25 per cent.

Saudi Arabia’s central bank said it was raising policy rates to preserve monetary stability.

It increased its repo rate to 300 basis points from 275 bps, and the reverse repo rate to 250 bps from 225 bps.

Meanwhile Kuwait’s central bank said that it had decided to maintain its discount rate unchanged at its current level of 3 per cent.