UAE Central Bank raises base rate by 50 basis points

The Central Bank of the UAE (CBUAE) will raise the base rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points from  from Thursday, May 5, 2022.

The decision was taken following the US Federal Reserve Board’s announcement on May 4, to increase the Interest on Reserve Balances (IORB) by 50 basis points, official news agency WAM reported.

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

The base rate, which is anchored to the US Federal Reserve’s IORB, suggests the general stance of the CBUAE’s monetary policy.

It also provides an interest rate floor for overnight money market rates.

In related financial news, the CBUAE also launched two new polymer banknotes, in five and ten dirham denominations last month. The new banknotes, which have been enhanced by technical characteristics and security features, are the third issue of the national currency.

The banknotes are also more durable and sustainable than traditional cotton paper ones, holding two or more times longer in circulation.

Read: UAE Central Bank launches two new banknotes

These issues follow the 50-dirham polymer note launched late last year.

Read: UAE launches new Dhs50 banknote to commemorate country’s golden jubilee

CBUAE also approved a new Emiratisation plan for managerial positions in the banking and insurance sectors in the UAE earlier this year. By virtue of this, it gas approved the creation of 5,000 new jobs by the end of 2026, in coordination with the Emirates Institute for Banking and Financial Studies and the Emirati Talent Competitiveness Council.

Read: UAE Central Bank approves creation of 5,000 jobs for Emiratis by 2026