UAE Holds Interest Rates After Fed Decision

The Central Bank of the UAE (CBUAE) maintained its overnight deposit facility base rate at 3.9% on Wednesday. The decision followed a similar move by the US Federal Reserve, which held the federal funds rate unchanged at 3.75%–4.00% at its October meeting. The UAE’s monetary policy remains closely aligned with that of the Fed. The Base Rate determines the overall stance of monetary policy and provides an effective floor for overnight money market rates in the country. The central bank also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.

The Central Bank of the UAE (CBUAE) raised its overnight deposit facility base rate by 25 bps to 3.9% in September 2026, mirroring the Federal Reserve’s decision. The UAE’s monetary policy remains closely aligned with that of the Fed, as the dirham is pegged to the US dollar. The decision followed the Fed’s announcement that it would raise the target range of the federal funds rate by 25 bps to 3.75%-4% at its meeting, while a majority of FOMC members projected another hike this year. The CBUAE also maintained the rate applicable to short-term liquidity borrowing from the central bank through all standing credit facilities at 50 bps above the Base Rate.

The Central Bank of the UAE (CBUAE) on Wednesday maintained its overnight deposit facility base rate at 3.65%. The decision followed a similar move by the US Federal Reserve, which continued to hold the federal funds rate unchanged at 3.50%-3.75% at its June meeting. The UAE’s monetary policy remains closely aligned with that of the Fed, as the dirham is pegged to the US dollar. "This decision was taken following the US Federal Reserve’s announcement today to keep the Interest Rate on Reserve Balances (IORB) unchanged," the central bank said in a statement. The central bank also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.