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# Central Bank of UAE Cuts Base Rate by 50 Basis Points to 4.90% in First Reduction Since 2020
- URL: https://www.theglobalbanker.com/central-bank-uae-cuts-base-rate-50-basis-points-4-90-first-reduction-since-2020/
- Published: 2024-09-18T19:30:00.000Z
- Updated: 2026-10-02T13:33:40.000Z
- Description: The CBUAE lowered its base rate from 5.40% to 4.90%, the first cut since the COVID-era reductions of 2020, in direct response to the Federal Reserve's opening move in its new easing cycle.
- Author: TGB Editorial Team
- Tags: Central Banks, MENA, #archive

The Central Bank of the UAE lowered its base rate by 50 basis points to 4.90% on Wednesday, reducing the benchmark from 5.40% in the first such adjustment since the COVID-era cuts of 2020\. The decision follows the Federal Reserve's announcement of its own 50-basis-point cut earlier the same day, and other Gulf central banks whose currencies are pegged to the US dollar, including those of Saudi Arabia and Bahrain, also cut rates.

The UAE dirham is pegged to the US dollar. 

#### PRIOR TIGHTENING

UAE rates were raised from near zero in 2022 and held at elevated levels through 2023 and into 2024\. Wednesday's cut begins to reverse that tightening for the first time in more than four years.

#### UAE LENDING BENCHMARK

Variable-rate personal loans, mortgages, and corporate credit facilities in the UAE are typically benchmarked against the Emirates Interbank Offered Rate, which tracks the CBUAE base rate closely. 

The CBUAE's announcement, published on the central bank's website, did not provide explicit guidance on the path of future rate decisions.