(Bloomberg) -- Gulf central banks including Saudi Arabia and the United Arab Emirates followed the Federal Reserve’s final decision of the year, cutting interest rates by 25 basis points on Wednesday as they seek to maintain their currencies’ peg to the US dollar.
Policymakers in the region usually have little room to maneuver due to the greenback-pegging policy and tend to move in lockstep with the US central bank decisions. Though, cost pressures in the Gulf have been relatively muted in comparison to the US.
“With today’s action, we have lowered our policy rate by a full percentage point from its peak and our policy stance is now significantly less restrictive,” Fed Chair Jerome Powell told reporters in a press conference following the Fed’s decision.
Read: Fed Lowers Rates by Quarter Point, Signals Two Cuts for 2025 (1)
- The UAE cut the Base Rate by 25 bps to 4.40%
- Saudi Arabia cut Repurchase Agreement (Repo) rate by 25 bps to 5%
- Qatar slashed the deposit rate by 30 bps to 4.60%
- Bahrain cut the overnight deposit rate by 25 bps to 5%
- Oman reduced Repo rate for local banks by 25 bps to 5%
--With assistance from Sherif Tarek.
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