The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) without change at 5.40%.

This decision was taken following the US Federal Reserve’s announcement on 31 January to keep the Interest on Reserve Balances (IORB) unchanged.

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

The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE.

The US Federal Reserve held its key interest rate steady earlier Wednesday and opened the door to rate cuts but hinted that a March move is probably a long shot despite rapidly slowing inflation.

“In considering any adjustments to the target range for the federal funds rate, the (Fed) will carefully assess incoming data, the evolving outlook and the balance of risks,” the central bank said.