By: Mahmoud Gamal
Abu Dhabi – Mubasher: Saudi Arabia, Kuwait, Bahrain, UAE and Qatar decided to raise their interest rates, following the Federal Reserve’s decision to raise rates on Wednesday.
The Fed raised its benchmark interest rate as expected by 25 basis points, as expected by many analysts and economists, to a 0.5% to 0.75% range
The Saudi Arabian Monetary Agency (SAMA) raised the reverse repo rate to 75 basis points, while the rate of repurchase agreements is kept unchanged at 200 basis points.
The Central Bank of Kuwait raised its discount rate by a quarter of a percentage point to 2.5%.
Bahrain’s central bank increased its overnight deposit to 0.75% percent and policy interest rate on its one-week deposit facility to 1%.
Qatar Central Bank (QCB) raised its lending rate by 0.25% to 4.5% from 4.75%, while the deposit rate increased to 1% from 0.75%, Qatar News Agency (QNA) reported.
The UAE Central Bank raised interest rates on its deposit certificates by 25 basis points, according to Reuters.
Raising interest rates by the three Gulf countries is normal following the Fed’s decision to do so as most GCC countries are pegged to the US dollar and affected by any changes in global oil prices, financial analyst Mohammed Al Ahbabi told Mubasher.
The Fed's move to raise interest rate aims to boost economy and international trade, thus affecting positively the US capital markets, financial analyst noted.
The Gulf stock markets will absorb the news on raising interest rate at a faster pace next year, especially amid the approach of fourth-quarter financial announcements, Al Ahbabi explained.
Translated by: Julian Nabil
