The Central Bank of the United Arab Emirates has kept its base interest rate unchanged at 3.65%, maintaining a steady monetary policy stance in line with global developments.
The decision applies to the base rate linked to the Overnight Deposit Facility and follows the US Federal Reserve’s move to leave its benchmark rate unchanged. This reflects the UAE’s policy approach of aligning closely with US monetary trends due to the dirham’s peg to the dollar.
In addition, the central bank maintained the rate for borrowing short term liquidity at 50 basis points above the base rate across all standing credit facilities. This ensures consistency in funding costs within the banking system.
The base rate serves as a key signal of the UAE’s monetary policy direction and acts as a floor for overnight money market interest rates. By holding it steady, policymakers aim to preserve financial stability while monitoring global economic conditions.
Analysts note that the move underscores a cautious approach, as authorities balance domestic economic needs with external influences. With interest rates unchanged, attention will shift to future policy signals from the US and their potential impact on the UAE’s financial environment.
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