The Central Bank of the United Arab Emirates has decided to reduce the “base rate” on overnight deposit facilities by 25 basis points, lowering it from 3.90% to 3.65%, effective Thursday, December 11.
This decision follows the Federal Reserve’s announcement of a 25 basis point cut in the interest rate on reserve balances during its meeting held today.
Additionally, the central bank has chosen to maintain the rate applicable to short-term liquidity borrowing from the central bank through all existing credit facilities at 50 basis points above the base rate.
The base rate, which is linked to the interest rate on reserve balances determined by the US Federal Reserve, reflects the overall monetary policy stance and establishes a minimum effective interest rate for overnight money market rates within the country.