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Saudi Arabia, UAE Central Banks raise Base Rate by 25 basis points

The Saudi Central Bank (SAMA) has decided to raise its repo rate by 0.25 percent from 1.00 to 1.25 percent and the reverse repo rate by 0.25 percent from 0.5 to 0.75 percent.

Policy rate adjustments are consistent with SAMA’s objectives of maintaining monetary stability and supporting the stability of the financial sector in the evolving domestic and international monetary conditions, Saudi press agency (spa) reported.

In Abu Dhabi, the Central Bank of the UAE (CBUAE) also decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points.

This decision was taken following the US Federal Reserve Board’s announcement on March 16 to increase the Interest on Reserve Balances (IORB) by 25 basis points, according to Emirates News Agency (WAM).

The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate.

The Base Rate, anchored to the US Federal Reserve’s IORB, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.

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