Gulf In Focus - Loans get cheaper in UAE.

Position:Central Bank of the United Arab Emirates cuts interest rates

The Central Bank of the UAE on Wednesday said that it was cutting interest rates applied on the issuance of certificates of deposits starting from Thursday, immediately following the US Federal Reserve's decision to cut rates by 25 basis points - the US central bank's first such move since the financial crisis of 2008. The UAE central bank said in a statement its repo rate for borrowing short-term liquidity had also been cut by 25 bps, effective from Thursday. Lower interest rates, when passed on to the consumer, would mean lower cost of borrowing money, thereby making loans cheaper. Central banks in Saudi Arabia and Bahrain followed the move, cutting their rates by the same margin.

Their currencies are pegged to the US dollar and they follow the Fed on interest rate moves. The Saudi Arabian Monetary Authority said it had cut its repo rate, used to lend money to banks, to 275 basis points from 300 bps, and the...

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