UAE, Saudi central banks hike repo rates

The move came after the US Federal Reserve raised its target range for the federal funds interest rate by a quarter point



The United Arab Emirates central bank said on Thursday that it was raising its repo rate by 25 basis points to 2.25 per cent and increasing interest rates on certificates of deposits by the same margin.

The move came after the U.S. Federal Reserve decided to raise its target range for the federal funds interest rate by a quarter of a percentage point, to between 1.75 per cent and 2 per cent.

On Wednesday, Saudi Arabia’s central bank also said that it was increasing its reverse repo rate, the rate at which commercial banks deposit money with the central bank, by 25 basis points to 2 per cent from 1.75 per cent.

It also raised its repo rate, at which it lends to banks, by 25 basis point to 2.5 per cent.

Bahrain’s central bank also raised its key policy interest rate by 25 basis points. The interest rate on the one-week deposit facility was raised to 2.25 per cent from 2 per cent, while the overnight deposit rate was raised to 2 per cent from 1.75 per cent.

The one-month deposit rate was increased to 3 per cent from 2.65 per cent, and the lending rate was increased to 4 per cent from 3.75 per cent.

Meanwhile Kuwait’s central bank said on Wednesday it will maintain its discount rate unchanged at 3 per cent.