The US Federal Reserve on Wednesday raised interest rates by half a percentage point (50 bps) at its final gathering of the year.

Following the Fed's move, the UAE and GCC central banks matched the 0.5% rate hike.

The Central Bank of Bahrain (CBB) was the first to announce the rate hike in the region.

Its key policy interest rate on the one-week deposit facility is raised from 4.75% to 5.25%. The CBB has also decided to raise the overnight deposit rate from 4.50% to 5.00%.

The Central Bank of the UAE (CBUAE) decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points, from 3.9% to 4.4%, effective from Thursday, 15 December 2022. 

The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate, it said in a statement.

The Qatar Central Bank has also decided to increase interest rates by 50 bps.

​The Saudi Central Bank has also raised the rate of Repurchase Agreement (Repo) by 50 basis points to 5% and the rate of Reverse Repurchase Agreement (Reverse Repo) by 50 basis points to 4.50% .

(Writing by Seban Scaria; editing by Anoop Menon)