GCC central banks raised key interest rates on Wednesday night after the US Federal Open Market Committee (FOMC) delivered its fourth consecutive 0.75% hike as part of its continuing struggle to tame a runaway inflation.
Central banks of the UAE, Qatar and Bahrain raised their benchmark rates by varying amounts to maintain their currencies pegs to the US dollar.
However, they have seen more muted inflation than elsewhere in the world due to price caps on rising fuel prices (except in the UAE) and on essential food items.
• The Central Bank of UAE raised its base rate on overnight deposits by 75 bps to 3.9%.
The Saudi Central Bank, also known as SAMA, lifted its repo and reverse repo rates by 75 bps to 4.5% and 4%, respectively.
• Qatar's central bank increased its lending rate by 50 bps to 5%; deposit rate and repo rate by 75 bps to 4.5% and 4.75% respectively.
• The Central Bank of Bahrain raised its key policy rate on its one-week deposit facility by 75 bps to 4.75%. The bank also raised the overnight deposit rate from 3.75% to 4.50%, the four-week deposit rate from 4.75% to 5.50% and the lending rates from 5.25% to 6%.
(Writing by Brinda Darasha; editing by Seban Scaria)