Banking & Finance Gulf central banks follow US Fed by lifting key rates By Pramod Kumar July 27, 2023, 5:02 AM WAM The UAE central bank lifted its base rate on the overnight deposit facility to 5.40% from 5.15% Most GCC central banks have increased their interest rates in line with the US Federal Reserve decision to hike rates by a quarter of a percentage point. The Fed raised its rate by 25 basis points (bps) on Wednesday, the highest US central bank policy rate in 16 years due to elevated inflation. The central banks of Saudi Arabia and the United Arab Emirates mirrored the Fed move. The Saudi Central Bank (Sama) increased its repo and reverse repo rates to six percent and 5.5 percent, respectively. GCC economies to grow at much slower pace in 2023 60% of young Arabs want to emigrate, survey finds Middle East IPO drive likely to cool in second half of 2023 The Central Bank of the UAE lifted its base rate on the overnight deposit facility to 5.40 percent from 5.15 percent from Thursday. It also decided to maintain the rate applicable to borrowing short-term liquidity through all standing credit facilities at 50 bps above the base rate. Qatar raised its key lending interest rate to 6.25 percent, deposit rate to 5.75 percent and repo rate to six percent. Bahrain raised the one-week deposit rate to 6.25 percent and the overnight deposit rate to six percent. The Central Bank of Kuwait raised its discount rate to 4.25 percent from four percent. The Federal Reserve’s rate hike is the 11th in its last 12 meetings, setting the benchmark overnight interest rate in the 5.25-5.50 percent range, indicating another possible increase.