CBUAE holds base rate at 3.65% — UAE borrowers — no rate cut expected

UAE borrowers waiting for cheaper mortgages, car loans and business finance may have to wait longer after the Central Bank of the UAE kept its Base Rate unchanged at 3.65%. The decision, announced on June 17, followed the US Federal Reserve's move to keep the Interest Rate on Reserve Balances unchanged. The CBUAE also maintained the rate applicable to borrowing short-term liquidity from the central bank at 50 basis points above the Base Rate for all standing credit facilities. The Base Rate applies to the Overnight Deposit Facility and is anchored to the US Federal Reserve's Interest Rate on Reserve Balances. The UAE's interest rate cycle closely tracks the US because the dirham is pegged to the dollar, keeping domestic monetary policy aligned with Fed decisions.