UAE central bank increases base rate by 25 basis points to match Fed
The central bank will keep the cost of borrowing short-term liquidity from the CBUAE at 50 basis points over the base rate for all open credit facilities.
ABU DHABI: As of Thursday, May 4, 2023, the Base Rate for the Overnight Deposit Facility (ODF) will increase by 25 basis points, from 4.90 percent to 5.15 percent, at the discretion of the Central Bank of the UAE (CBUAE).
Following the US Federal Reserve Board's announcement to raise the Interest on Reserve Balances (IORB) by 25 basis points on May 3, 2023, this decision was made.
The CBUAE has also decided to keep all standing credit facilities' applicable rates for short-term liquidity borrowing from the CBUAE at 50 basis points above the Base Rate.
The Base Rate, which is tied to the IORB of the US Federal Reserve, conveys the CBUAE's monetary policy's overarching direction. Additionally, it offers a useful floor for overnight money market rates.