The Central Bank of the UAE reduced its base rate by 25 basis points to 4.65% on 7 November 2024, moving in step with the US Federal Reserve's own rate decision announced on the same day. The CBUAE's base rate is tied to the US federal funds rate through the dirham's fixed peg to the US dollar.
DOLLAR PEG AND DOMESTIC BACKDROP
The dirham's fixed exchange rate against the US dollar has been in place since 1997. Under this framework, the Central Bank of the UAE generally follows Federal Reserve rate changes.
Non-oil GDP growth in the UAE has been running above 4%.
The Central Bank of the UAE confirmed the rate decision in a statement published on its website. The new rate took effect on 8 November 2024, and the CBUAE kept the rate on its standing credit facilities at 50 basis points above the Base Rate.
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