UAE interest rate cut = cheaper loans, mortgages

By Eudore R. Chand

ABU DHABI 3 November 2019: The Central Bank of the UAE (CBUAE) has lowered interest rates on issuance of its Certificates of Deposits from Thursday, October 31, 2019, in line with the decrease in interest rates on US dollar.

The US Federal Reserve Board decided to decrease the Federal Funds Rate by 25 basis points at its meeting.

The Repo Rate applicable to borrowing short- term liquidity from CBUAE against Certificates of Deposits has also been decreased by 25 basis points.

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.

Lewis Allsopp, CEO of Allsopp & Allsopp, said: “The cut in interest rates is great news for existing home owners who are on a variable rate mortgage and for new buyers. The cost of borrowing in the UAE is the cheapest we have seen in some time and buyers will see their affordability ratio become slightly higher with lower lending rates…The main issue new buyers face is affordability and it is encouraging to see the UAE Central Banks taking steps to ease the buying process.”