Abu Dhabi: The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 4.40%. This decision aligns with the current monetary policy strategy and reflects the central bank's response to global economic signals.
According to Emirates News Agency, this decision was taken following the US Federal Reserve's announcement to keep the Interest Rate on Reserve Balances (IORB) unchanged. The CBUAE's decision to maintain the interest rate applicable to borrowing short-term liquidity from the bank at 50 basis points above the Base Rate for all standing credit facilities is also consistent with this strategy.
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. This connection underscores the UAE's monetary policy framework, which aims to ensure economic stability and efficient financial market operations.