The UAE, Saudi Arabia and Bahrain raise the interest rate… and Qatar fixes it | Gulf newspaper

Central banks in the UAE, Saudi Arabia and Bahrain raised interest rates by 25 basis points, following the announcement of the Federal Reserve, on Wednesday, to raise the interest rate on reserve balances by 25 basis points.

And the Central Bank of the Emirates decided to raise the “base rate” on the overnight deposit facilities by 25 basis points – from 4.4% to 4.65%, as of Thursday, February 02, 2023.

The Central Bank also decided to keep the price that applies to borrowing short-term liquidity from the Central Bank through all existing credit facilities at 50 basis points above the base price.

In Saudi Arabia, the Central Bank decided to raise the rate of the repurchase agreement (repo) by 25 basis points to 5.25 percent, and to raise the rate of the reverse repurchase agreement (reverse repo) by 25 basis points to 4.75 percent.

The Central Bank of Saudi Arabia said that its decision comes in light of monetary developments in global markets, and taking into account the objectives of the Central Bank to maintain monetary stability and support financial stability.

The Central Bank of Bahrain raised the main interest rates by 25 basis points, and stated in a statement that the interest rate on deposits for a week rose to 5.5 percent from 5.25 percent, and the interest rate on deposits for one night rose to 5.25 percent from five percent.

He said that the interest rate on deposits for four weeks rose to 6.25 percent and the lending rate rose to 6.75 percent.

Qatar violates

For its part, the Qatar Central Bank said, on Wednesday, that it decided to maintain the current interest rates after the Federal Reserve raised interest rates by 25 basis points.

The Qatar Central Bank will keep the deposit interest rate and the lending and repurchase interest rate at 5 percent, 5.5 percent and 5.25 percent, respectively. The bank usually follows the example of the Federal Reserve because the Qatari riyal is pegged to the dollar.

The Fed decided to raise interest rates by 25 basis points to a range between 4.5% and 4.75%. This is the eighth consecutive time that the Fed has raised interest rates since March 2022.

The “reserve” raised the interest rate by 50 basis points last December, after raising it by 75 basis points in each of November, September, July and June, in the largest increase since 1994, in addition to raising it by 50 basis points in May, which is the largest increase since 22 years, and an increase of 25 basis points in March of the same year. (agencies)