UAE Central Bank raises interest rates

UAE Central Bank raises interest rates

The Central Bank of UAE (CBUAE) has decided to raise interest rates applied to the issuance of its certificates of deposits as of today. The decision come close on heels with US Federal Reserve’s decision to increase the federal funds rate by 25 basis points that has led to an increase in interest rates on the US Dollar.

The Central Bank has raised the repo rate applicable to borrowing short-term liquidity against certificates of deposits by 25 basis points to 2.25 percent.

Meanwhile, 6 to 12 month term deposits soared to AED 190 billion ($51.7 billion) during the first four months of 2018, a 14.9 percent growth from the AED 165.3 billion ($45 billion) reported at the end of 2017.

The statistics show that 6 to 12 month deposits account for about 22.7 percent of total term deposits in UAE banks, which were valued at AED 837.8 billion ($228.1 billion) at the end of April.

April saw the highest performance of this type of deposits, with a total inflow of around AED 16 billion ($4.3 billion) during the month, compared to AED 8.7 billion ($2.3 billion) between January and March.