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| 22 March, 2018

Taking a loan in UAE is going to be more expensive

The Central Bank's decision came soon after the announcement of a similar rate rise by the US Federal Reserve.

Image used for illustrative purpose. Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013.

Image used for illustrative purpose. Vehicles stop at a red light in front of the main branch of UAE Central Bank in Abu Dhabi, January 29, 2013.

REUTERS/Ben Job

The Central Bank of the UAE announced on Wednesday that it would raise interest rates by 25 basis points, paving the way for higher borrowing costs in 2018.

The Central Bank's decision came soon after the announcement of a similar rate rise by the US Federal Reserve in its first interest rate increase of 2018 at the conclusion of a two-day policy meeting as the US economy continues to strengthen.

The Central Bank announced that, effective Thursday, March 22, 2018, it will raise interest rates applied to the issuance of its Certificate of Deposits in line with the increase in interest rates on the US dollar, following the Federal Reserve Board's decision to increase the Federal Fund Rate by 25 basis points, the bank said.

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The Repo Rate applicable to borrowing short-term liquidity from UAE Central Bank against Certificates of Deposits has also been increased by 25 basis points to two per cent.

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