Today: 24 April 2025
19 September 2024
1 min read

UAE central bank matches US Fed’s 50bp cut

This decision was taken following the US Federal Reserve’s announcement today to reduce the Interest Rate on Reserve Balances (IORB) by 50 basis points….reports Asian Lite News

The Central Bank of the UAE (CBUAE) has decided to cut the Base Rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points, from 5.40 to 4.90 percent, effective from 19th September.

This decision was taken following the US Federal Reserve’s announcement today to reduce the Interest Rate on Reserve Balances (IORB) by 50 basis points.

The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.

The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.

It was the US central bank’s first reduction in four years. It comes down from 5.35 per cent to between 4.75 per cent and 5 per cent.

“Recent indicators suggest that economic activity has continued to expand at a solid pace,” the Federal Reserve said in a statement.

Job gains have slowed, and the unemployment rate has moved up but remains low. Inflation has made further progress toward the Committee’s 2 per cent objective but remains somewhat elevated.

“In light of the progress on inflation and the balance of risks, the Committee decided to lower the target range for the federal funds rate by 1/2 percentage point to 4-3/4 to 5 per cent.”

In the run-up to the Fed’s two-day meeting, it was expected to announce a hike but there was speculation if it will opt for a more modest 0.25 percentage or 0.5 percentage point. It chose the latter, signaling urgency in dealing with declining job numbers now that inflation had been reined in.

The rate will reduce the costs of house mortgage, auto loans and other credit-based business, and encourage businesses to expand and step up production, hire more people.

ALSO READ: MBZ to begin ‘historic’ US visit next week

Previous Story

MBZ to begin ‘historic’ US visit next week

Next Story

Sharjah unveils world’s first AI-powered trade licence

Latest from -Top News

Modi Strengthens Defence, Energy Ties in Saudi

Both sides agreed to hold the next Strategic Partnership Council meeting at a mutually convenient date….reports Asian Lite News India and Saudi Arabia have expanded their bilateral Strategic Partnership Council by adding

Muslim World League Condemns Terror in Pahalgam

Prime Minister Modi commended the firm stand of the Muslim World League against extremism, terrorism and violence….reports Asian Lite News The Muslim World League has condemned the horrific terror attack in Pahalgam,

Pahalgam attack: Modi Cancels Saudi Plans

Sources said that the Prime Minister also skipped the official dinner hosted by Saudi Arabia and has decided to cut short his visit…reports Asian Lite News Prime Minister Narendra Modi will shorten

Modi Begins Saudi Visit

This will be Prime Minister Modi’s first visit to the historic city of Jeddah where the second meeting of the Strategic Partnership Council (SPC) will also take place…reports Asian Lite News Prime

UAE Eyes Investment in Pakistan

Sheikh Abdullah will hold a meeting with Pakistani Prime Minister Shehbaz Sharif UAE Deputy Prime Minister and Foreign Minister Sheikh Abdullah bin Zayed Al Nahyan arrived in Islamabad for a two-day visit
Go toTop

Don't Miss

UAE braces for Ramadan

The UAE Ministry of Economy has adopted strategies to protect

UAE, Turkish presidents discuss bilateral relations

The two sides discussed various regional and international developments and