UAE borrowing costs to remain steady as Central Bank holds rates

Borrowing costs in the UAE will continue to remain stable as the UAE Central Bank maintained its benchmark overnight deposit rate at 4.4 per cent on Wednesday.

- Somshankar Bandyopadhyay [e-mail]

The Central Bank’s decision followed the move by the US Federal Reserve, which maintained its target range for the federal funds rate at 4.25 to 4.5 per cent.

The CBUAE has also decided to maintain the interest rate applicable to borrowing short-term liquidity from the apex bank at 50 basis points above the Base Rate for all standing credit facilities. “The Base Rate, which is anchored to the US Federal Reserve's Interest Rate on Reserve Balances, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE,” a statement said.