The Central Bank of the UAE (CBUAE) will maintain the base rate applicable to the Overnight Deposit Facility (ODF) without change at 5.15%, effective from Thursday, 15 June 2023.
This decision followed the US Federal Reserve Board’s announcement on Wednesday to keep the Interest on Reserve Balances (IORB) unchanged.
The US Federal Reserve left key interest rates unchanged at 5 to 5.25% on Wednesday, citing expanded economic activity in recent months and robust job gains, which has kept unemployment low. However, according to the Fed’s estimates, most policymakers are projecting two more quarter-point increases this year, in a move that would lift the benchmark rate to 5.5% to 5.75%.
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, also provides an effective interest rate floor for overnight money market rates in the UAE.