Gulf central banks raise interest rates after US Federal Reserve decision

Gulf central banks have announced an interest rate hike in in line with the decision of the US Federal Reserve.

Today, Wednesday, the US Federal Reserve approved an interest rate hike of 75 points, in in line with market expectations.

The Saudi Central Bank has decided to increase the repo rate by 75 basis points to 4.5% and the reverse repo rate by 75 basis points to 4.00%.

The Central Bank of the United Arab Emirates also decided to raise the base interest rate by 75 basis points to 3.90%.

UAE Central has decided to keep the rate that applies to the short-term liquidity loan from the Central Bank across all existing credit lines at 50 basis points above the base rate.

the two seas

The Central Bank of Bahrain said it raised its key one-week deposit interest rate by 75 basis points to 4.75%. in in line with the rise of the Federal Reserve.

The Central Bank of Bahrain also raised the overnight deposit rate by 75 basis points to 4.5%, the interest on four-week deposits to 5.5% and the interest on loans to 5%.

Diameter

The Central Bank of Qatar has announced that it will raise interest rates by 75 basis points, starting Thursday, in in line with the Federal Reserve’s third increase of this size in the interest rate.

Qatar Central Bank said in a statement that you have increased the interest on the loan to 5%, the interest on the deposit to 4.5% and the repurchase interest (repo) to 4.75%.

Kuwait

For its part, the Central Bank of Kuwait said it continuously monitors all economic and monetary developments and indicators in international markets, geopolitical developments and their impact on global economic conditions.

And the central bank added in a statement following the Fed’s decision: “In light of the political response imposed by these developments and their repercussions, according to the requirements and conditions of each economy, taking into account the nature of our national economy.”

Central Kuwait stressed that local economic and financial data and information available to it still reflect the continuing soundness and strength of the conditions of monetary and financial stability in the state of Kuwait.

It claims that the inflation rate in the consumer price index has slowed from its highest rate in April 2022, of about 4.71%, to reach about 3.19% in September 2022, as well as the continuing relative stability of the Kuwaiti dinar exchange rate against major currencies.

On the other hand, resident deposit balances with the banking system grew by around 5.2% at the end of September 2022 compared to the end of 2021 and the deposits of the private sector in Kuwaiti dinars made up 95.4% of total private sector deposits at the end of September 2022. Credit (for residents and non-residents) grew in the indicated month by 7.9% compared to the end of the previous year.

In this regard, Central Kuwait affirmed its willingness to activate and strengthen all the tools at its disposal to achieve its objectives, including interventions on the money market to regulate liquidity levels.

The Central Bank said that this fits within the framework of the balanced approach pursued by the Central Bank of its monetary policy aimed at dedicating monetary and financial stability to the units of the banking and financial sector, while maintaining the attractiveness of the national currency as a reliable vessel for national savings and the improvement of the atmosphere conducive to sustainable economic growth.

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