Today, on Wednesday, Saudi Arabia, the UAE and Bahrain raised interest rates by about 25 basis points to keep up with the actions of the US Federal Reserve, while Qatar decided to correct the situation.
And the US Federal Reserve approved a 25-point rate hike, in line with market expectations, to a range of 5-5.25%.
Most Gulf countries such as Saudi Arabia, the UAE, Qatar and Bahrain peg their currencies to the dollar and follow the lead of the US Central Bank with regard to monetary policy.
And the Central Bank of Saudi Arabia has decided to raise the repurchase agreement rate by 25 basis points to 5.75%.
The Central Bank of Saudi Arabia also decided, according to a statement seen by Al-Arabiya.net, to raise the reverse repo rate under the reverse repo agreement by 25 basis points to 5.25%.
For its part, the UAE Central Bank also decided to raise its base interest rate by 25 basis points to 5.15%.
The Central Bank of Bahrain has decided to raise its base interest rate by 25 basis points in light of developments in international financial markets and as part of the measures taken by the Central Bank to ensure the smooth operation of money markets.
The central bank said in a statement that it raised the base interest rate on weekly deposits from 5.75% to 6.00%.
The Central Bank of Bahrain also raised the interest rate on overnight deposits from 5.50% to 5.75% and raised the interest rate on four-week deposits from 6.50% to 6.75%. This is in addition to an increase in the interest rate set by the Central Bank for retail banks in exchange for credit services from 6.75% to 7.00%.
The Central Bank said that it continues to monitor developments in the international and domestic markets in order to take any additional measures necessary to maintain monetary and financial stability in the Kingdom.
On the other hand, the Central Bank of Qatar has decided to keep interest rates on deposits and interest on loans and repurchases unchanged, and the bank said in a statement that it is committed to keeping interest rates at an appropriate level to support sustainable economic growth.
