UAE Central Bank Maintains Rates Following US Federal Reserve Decision

UAE, 21 March, 2024 : The Central Bank of the UAE (CBUAE) has opted to maintain its interest rates in line with the US Federal Open Market Committee's decision to keep benchmark rates steady between 5.25% and 5.5%. The CBUAE announced its decision to keep the Base Rate for the Overnight Deposit Facility (ODF) unchanged at 5.40%, following the US Federal Reserve's recent announcement to maintain the Interest on Reserve Balances (IORB).

Additionally, the CBUAE has chosen to retain the interest rate for short-term liquidity borrowing from the CBUAE, set at 50 basis points above the Base Rate for all standing credit facilities.

The FOMC acknowledged that while inflation has eased over the past year, it remains elevated, aiming to achieve maximum employment and a 2% inflation rate over the long term. Economic activity has shown robust growth, with strong job gains and low unemployment rates, according to the FOMC statement.

Bloomberg reported projections from the FOMC's dot plot indicating three quarter-point cuts in 2024, with the next FOMC meeting scheduled for April 30/May 1. US Fed Chairman Jerome Powell stated in a press conference after the announcement that the first reduction is likely to occur "at some point this year."

Source : www.zawya.com