ABU DHABI: The Central Bank of the UAE has announced that, as of Thursday March 16th, it will raise interest rates applied to the issuance of its Certificates of Deposits.
This follows the increase in interest rates on the US Dollar, following the Federal Reserve Board’s decision to increase the Federal Funds Rate by 25 basis points.
“The Repo Rate applicable to borrowing short-term liquidity from CBUAE against Certificates of Deposits has also been increased by 25 basis points to 1.25%,” the bank added.
Certificates of Deposit, which CBUAE issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the UAE banking system.
Saudi central bank raises reverse repo rate, keeps repo flat
Meanwhile, Saudi Arabia’s central bank said that it had raised its reverse repo rate, the rate at which commercial banks deposit money with the central bank, by 25 basis points to 1.00 per cent.
But the central bank said it was keeping its repo rate, which it uses to lend money to banks, unchanged at 2.00 per cent.
A central bank statement said the decisions were in response to developments in domestic and international financial markets; it did not elaborate, according to Reuters, said Wam.
– By Rajive Singh