UAE central bank will not follow US Federal Reserve

Gulf News

The UAE Central Bank said on Tuesday it would not cut interest rates if the US Federal Reserve eases its rate - the second time the country would refrain from mirroring the Fed.

Until late October, the UAE had been keeping its benchmark overnight repurchase rate at the same level as the Fed funds rate.

Then, in a shock move, the Central Bank decided not to track a 50-basis-point Fed cut on October 29, keeping its overnight repurchase rate at 1.5 per cent.

Today the Fed announced that it would cut it the rate to between 0 and .25 per cent -- the market had expected a cut to .5 percent. Actually, the Fed has been letting the rate track close to 0 for several weeks.