The current high-interest rates are likely to continue into 2024, with the first cuts possible in the latter part of Q1 2024, according to UAE’s biggest lender, First Abu Dhabi Bank (FAB).

Interest rate in the UAE remained unchanged at 5.15 % in June 2023.

“Sharply higher interest rates put in place by the global central banks, and increasing over the last 12 to 15 months, have been in force as the world experiences above-trend inflation post the Covid pandemic, Alain Marckus, Managing Director and Head of Asset Management, FAB Global Private Banking Group said at a forum held for the bank’s global private banking clients.

Inflation and rising interest rates have pressured financial markets since the beginning of 2022. 

The current landscape has many investors reassessing the merits of alternative asset classes versus traditional asset classes, Marckus said, emphasising alternative assets, such as private markets and better-value stock markets, recently offered uncorrelated returns to investors. 

He noted that alternative assets and some attractive non-dollar exposure can still be found in the Middle East and North Africa (MENA) and Japan, where economic fundamentals remain conducive. 

FAB expects the trend will continue in the near term, Marckus added.

(Editing by Seban Scaria