GCC central banks raise interest rates to fight inflation
The US Federal Open Market Committee (FOMC) hiked its key interest rates by 75 basis points (bps) on Wednesday, to fight rising inflation. Many GCC economies also matched the rate hike by increasing their lending rates.
Fed Chairman Jerome Powell’s decision, which was announced at 2 p.m. in Washington, was the third straight interest rate hike of 75 basis points.
The Central Bank of Bahrain (CBB) was the first to announce the rate hike in the GCC.
The CBB’s key policy interest rate on the one-week deposit facility is raised from 3.25% to 4.00%. The CBB has also decided to raise the overnight deposit rate from 3.00% to 3.75%, the four-week deposit rate from 4.00% to 4.75% and the lending rates from 4.50% to 5.25%.
The Central Bank of the UAE (CBUAE) will raise its base rate applicable to the Overnight Deposit Facility (ODF) by 75 basis points – from 2.4% to 3.15%, effective from Thursday, 22 September 2022.
The CBUAE has also 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, according to a statement.
Qatar has also hiked its interest rates, matching the US one by 0.75%.
The central bank increased its lending rate to 4.5%, the deposit rate to 3.75% and the repo rate to 4.0%.
The Central Bank of Kuwait said it will raise interest rates by 0.25% to 3% from tomorrow.
