At its meeting on January 18, the Board of Directors of UAE Central Bank decided to reduce interest rates by 50 basis points to 1%, with immediate effect.
In a statement from the Central Bank, Chairman Khalil Foulathi stated “that with the slowdown of the world economy and the fall in inflationary pressures, a rate cut at this juncture will support domestic economic activity and foster business confidence.”
“This 50 bps cut should further reduce the cost of the liquidity supporting facilities implemented by the Central Bank to support banks. Also lower costs of funds will ultimately reduce customer loan interest rates, and would further enhance the sustained development prospects,” read the statement.
The Saudi Arabian Monetary Agency also announced a similar cut to its benchmark repurchase rate this week from 2.5% to 2%.
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