Abu dhabi: The Central Bank of the UAE (CBUAE) has announced a reduction in the Base Rate for the Overnight Deposit Facility (ODF) by 25 basis points, moving it from 4.15% to 3.90%. This change will take effect on Thursday, 30 October.
According to Emirates News Agency, this decision follows the US Federal Reserve's move to decrease the Interest Rate on Reserve Balances (IORB) by 25 basis points. The CBUAE aims to align its monetary policy with the US Federal Reserve's actions.
Additionally, the CBUAE will keep the interest rate for borrowing short-term liquidity from the bank at 50 basis points above the Base Rate for all standing credit facilities. This measure ensures that the cost of borrowing remains stable for financial institutions seeking short-term liquidity.
The Base Rate, which is linked to the US Federal Reserve's IORB, reflects the overall direction of monetary policy and establishes a minimum for overnight money market interest rates in the UAE. This adjustment signifies the CBUAE's response to global monetary policy changes and its impact on the UAE's financial landscape.