UAE central bank maintains base rate on deposits at 15 basis points

The base rate will be anchored to the US Federal Reserve Board's IORB rate, effective from 29 July 2021

  
General view of the Central Bank of UAE on January 3, 2017

General view of the Central Bank of UAE on January 3, 2017

Getty Images

The Central Bank of the UAE (CBUAE) has decided to maintain the base rate applicable to the Overnight Deposit Facility (ODF) at 15 basis points, effective from Thursday, 29 July 2021.

This decision was taken following the US Federal Reserve Board’s announcement on 28 July 2021 to set the Interest on Reserve Balances (IORB) at 15 basis points, the apex bank said in a statement. 

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.

The base rate, which signals the general stance of the CBUAE’s monetary policy, will be anchored to the US Federal Reserve Board’s IORB rate, effective from 29 July 2021.

This follows the Federal Reserve’s announcement that, as of 29 July 2021, rates applicable on Interest on Excess Reserves (IOER) and Interest of Requited Reserves (IORR) will be replaced by the single IORB rate. Previously, the rate applicable to IOER had been the anchor for the CBUAE’s base rate.

(Writing by Seban Scaria; editing by Daniel Luiz)

(seban.scaria@refinitiv.com)

This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.  

© ZAWYA 2021


More From GCC