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UAE Central Bank Maintains Base Rate Amidst Unchanged Federal Policy

The Central Bank of the UAE (CBUAE) has chosen to keep the Overnight Deposit Facility (ODF) base rate at 5.40%.

The Central Bank of the UAE (CBUAE) has decided to maintain the base rate for the Overnight Deposit Facility (ODF) at 5.40%. 

This decision comes after the US Federal Reserve Board’s announcement to keep the Interest on Reserve Balances (IORB) unchanged.

The rate for Short-Term Liquidity Borrowing:

Additionally, the CBUAE has chosen to keep the rate applicable to borrowing short-term liquidity from the CBUAE via all standing credit facilities at 50 basis points above the Base Rate.

Significance of the Base Rate:

The Base Rate, closely linked to the US Federal Reserve’s IORB, serves as an indicator of the general stance of the CBUAE’s monetary policy. 

It also establishes an effective interest rate floor for overnight money market rates within the UAE.

This report highlights the CBUAE’s decision to maintain the base rate in alignment with the US Federal Reserve’s policy, reflecting the central bank’s monetary policy stance and its impact on overnight money market rates in the UAE.

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