UAE cuts key interest rate by 25 Basis Points

Coordination with US Federal Reserve

The move follows the US Federal Reserve’s decision to cut the Interest Rate on Reserve Balances (IORB) by 25 basis points, aligning the UAE’s monetary policy with global benchmarks.

Short-term borrowing rate maintained

The CBUAE also confirmed that the interest rate for borrowing short-term liquidity from the central bank will remain at 50 basis points above the Base Rate across all standing credit facilities.

Role of the Base Rate

Anchored to the US Federal Reserve’s IORB, the Base Rate signals the overall stance of monetary policy and provides a floor for overnight money market rates in the UAE.