UAE Central Bank cuts interest rates to stem coronavirus impact

Move comes after US Federal Reserve cuts rate to near zero

General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

General view of Central Bank of The U.A.E. on January 3, 2017 in Dubai, United Arab Emirates.

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The UAE Central Bank cut its interest rates on Monday as part of an emergency response to cushion the economic impact of coronavirus.

The country’s regulator said it has reduced the interest rate applicable to the one-week certificates of deposit (CD) by 75 basis points.

It said it will also maintain the repo rate, applicable to borrowing short-term liquidity from the central bank against CDs, at 50 basis points above the one-week CD rate.

The rates applicable to the interim margin lending facility, as well as the collateralized Murabaha facility, has also been reduced by 50 basis points.

The move is in response to the decision of the US Federal Reserve to cut its benchmark rate to near zero, 0 percent to 0.25 percent, said to be the boldest move since the global financial crisis in 2008.

The number of coronavirus cases has surged to more than 170,000 worldwide since it was first reported in late December.

The outbreak has led to numerous flight cancellations, travel bans, lockdowns; company, school and public venue closures that are hurting businesses worldwide.

Analysts have warned that if the virus is not contained soon, the global economy will be brought down to its knees.

The UAE government announced this weekend that it has approved a $27 billion economic plan to revive the local economy.

(Writing by Cleofe Maceda; editing by Seban Scaria) 

#UAE. #Economy #Coronavirus

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