5 Gulf central banks raise interest rates after the Fed's decision

Five central banks in the Gulf countries raised interest rates in response to the US Federal Reserve's decision to raise interest rates.

According to Arabiya Net, the US Federal Reserve's Open Market Committee decided to raise the federal funds interest rates by 75 basis points to reach 2.5%, an increase for the fourth time this year.

The Saudi Central Bank announced raising the rate of reverse repo repurchase agreements by 75 basis points from 2.25% to 3.00%, as well as raising the rate of reverse repurchase agreements by 75 basis points from 1.75% to 2.50%.

The Central Bank of the United Arab Emirates decided to raise the base rate on the overnight deposit facilities by 75 basis points, as of Thursday, July 28, 2022.

The UAE Central also decided to keep the rate that applies to borrowing short-term liquidity from the Central Bank through all existing credit facilities at 50 basis points above the base rate.

The Central Bank of Kuwait announced that the discount rate will be raised by a quarter of a percentage point to 2.50% from 2.25% as of tomorrow.

The Governor of the Central Bank of Kuwait, Basil Al-Haroun, said that it was also decided to make an adjustment of varying rates in the rates of intervention in the monetary market, which are currently applied to all periods of the interest rate structure.

Al-Haroun added that this also includes repurchase operations (repo), Central Bank of Kuwait bonds and securitization, the system for accepting time deposits, direct intervention tools, in addition to public debt instruments.

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Qatar Central Bank announced that interest rates will be raised as of Thursday, July 28, 2022, whereby the bank’s deposit rate (QCBDR) will be raised by 75 basis points to 3.00%, and the lending interest rate from the bank (QCBLR) will be raised by 50 basis points. to become 3.75%.

The Qatar Central Bank also decided to raise the QCB Repo Rate by 75 basis points to 3.25%

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The Bahraini Central Bank kept pace with the interest rate hike, stressing that its decisions come in light of developments in the international financial markets, and within the measures taken by the Central Bank to ensure the smooth performance of the money markets in the Kingdom of Bahrain.

The Central Bank of Bahrain raised the basic interest rate on one-week deposits from 2.50% to 3.25%.

The interest rate on overnight deposits was also raised from 2.25% to 3.00%, and the interest rate on deposits for a period of four weeks was raised from 3.25% to 4.00%. This is in addition to raising the interest rate imposed by the Central Bank of Bahrain on retail banks in return for lending facilities from 3.75% to 4.50%.

The Central Bank said that it continues to monitor developments in the international and local market, in order to take any necessary additional measures in order to maintain monetary and financial stability in the Kingdom.