Loans getting cheaper as Eibor continues to fall
ABU DHABI 11 August 2020: The Interbank lending rate – Eibor – has continued to remarkably decline across all terms, with the six-month rate slipping to a several-year-old trough of 0.699 percent on August 10th from 2.2 percent early this year.
The one-year term is following suit dipping to 0.941 percent against 2.28 percent during the same reference period, according to the Central Bank of the UAE’s figures.
The rate serves as the yardstick for other interest rates in the economy, including lending and financing rates of differing types, which reflects positively on reducing business costs nationwide, said Wam.
It’s noteworthy that the United Arab Emirates is ranked 16th among 190 economies in the ease of doing business, according to the latest World Bank annual ratings.
The three-month, one-month and one-week interest rates likewise declined to 0.46 percent, 0.26 percent and 0.15 percent respectively.
The UAE Dirham is pegged to the US Dollar and therefore the interest decline is attributed to the US Federal Reserve’s decisions that lowered interest rates more than once over the past months.