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The Gulf Central Banks Raise Interest rates by 0.50%

The Gulf Central Banks raised its key interest rate after the Federal Reserve (Fed) increased rates by 0.50% at its meeting yesterday.

The currencies of most Gulf countries are pegged to the U.S. dollar, with the exception of Kuwait, which pegs the Kuwaiti dinar to a basket of currencies that includes the U.S. dollar.

The central banks of Saudi Arabia (SAMA), the United Arab Emirates (CBUAE), Qatar and Bahrain raised their key interest rates by 0.50%, while the Central Bank of Kuwait raised its policy rate by 0.25% to 2%.

SAMA raised both the repo rate and the reverse repo rate by 0.50% to 1.75% and 1.25%, respectively.

Meanwhile, the CBUAE said that the key interest rate will be raised by 0.50% to 2.25%, effective today.

Qatar’s central bank said it would raise its deposit and repo rates by 0.50% to 1.50% and 1.75% respectively, effective today. And the loan interest rate will increase by 0.25% to 2.75%.

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