KHALEEJ TIMES, Wednesday , Jun 13, 2018 | Ramadan 28, 1439
UAE's key interest rates may go up
Key interest rates in the UAE are likely to go up
from tomorrow (Thursday) as the US Federal Reserve is expected to increase rates
in today's (Wednesday) meetin
"We see most GCC central banks raising their
benchmark rates in line with the Fed. The Central Bank of the UAE is expected to
increase its repo rate (lending rate) by 25bps to 2.25 per cent," Monica Malik,
chief economist, Abu Dhabi Commercial Bank said in a note.
The policymaking Federal Open Market Committee of
the US is widely expected to raise the rates by 25bps to 2 per cent on Wednesday
Anita Yadav, head of fixed income research at
Emirates NBD, also said in a note that FOMC is widely expected to raise rates by
another 25 basis points.
The UAE raised interest rates on certificates of
deposits by 25 basis points in March 2018 to 2 per cent. Certificates of
deposit, which the UAE Central Bank 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.
In the GCC, Saudi Arabia Monetary Authority is
also likely to hike by the same magnitude. However, Qatar will again keep its
benchmark lending rates steady at five per cent, Monica Malik said.