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Home News UAE Central Bank Raises Base Rate to 3.9% After US Fed Hike

UAE Central Bank Adjusts Base Rate to 3.9% Following US Fed Decision

Sep 16, 2026
60 min
5
Sep 16, 2026 18:30
UAE Central Bank raises base rate to 3.9% after US Fed rate hike

## UAE Central Bank Rate Adjustment

The Central Bank of the UAE has increased its base rate by 25 basis points, bringing it to 3.9%. This change, effective from September 17, aligns with a similar rate hike by the US Federal Reserve.

## Impact of US Federal Reserve's Decision

The US Federal Reserve announced an increase in the Interest Rate on Reserve Balances by 25 basis points on September 16. This move prompted the UAE Central Bank to adjust its own base rate, maintaining its monetary policy in sync with the US due to the dirham's peg to the dollar.

## Overnight Deposit Facility and Short-term Borrowing

The new base rate applies to the UAE's Overnight Deposit Facility, providing a benchmark for overnight money market interest rates. Additionally, the interest rate for short-term liquidity borrowed from the central bank remains at 50 basis points above the base rate.

## Monetary Policy Implications

The adjustment in the base rate reflects the UAE's strategy to align its monetary policy with the US Federal Reserve, ensuring stability in the financial markets. This decision underscores the interconnectedness of global financial systems and the influence of US monetary policy on the UAE's economic framework.

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