Most central banks in the Gulf Cooperation Council (GCC) trimmed their interest rates within hours after the US Federal Reserve voted to lower the benchmark rate for the third consecutive time on Wednesday. 

In a widely expected move, the US Federal Open Market Committee voted near unanimously to cut the federal funds rate to a range between 4.25% and 4.50%.

Most GCC central banks usually track the Fed's policy rate moves as their currencies are pegged to the US dollar. Kuwait is the only exception in the six-member economic bloc as its dinar is linked to a basket of currencies.

The Central Bank of the UAE cut its base rate on overnight deposits by 25 basis points (bps) to 4.40% while maintaining the short-term borrowing rate at 50 bps above the base rate.

Saudi Arabia’s SAMA reduced its repo and reverse repo rates by 25 bps each to 5% and 4.50%, respectively.

Qatar's central bank implemented a 30 bps reduction across its deposit, lending, and repo rates, lowering them to 4.60%, 5.10%, and 4.85%, respectively.

The Central Bank of Bahrain cut its overnight deposit rate by 25 bps from 5.25% to 5.00%, effective 19 December 2024. In Oman, the monetary authority cut its repo rate by 25 bps to 5%.

(Reporting by Brinda Darasha; editing by Anoop Menon)
brinda.darasha@lseg.com