UAE Central Bank follows Fed move, holds interest rates steady

UAE Central Bank follows Fed move

The CBUAE's Base Rate is anchored to the US Federal Reserve's IORB, so it is not surprising that the two central banks are moving in lockstep. The CBUAE's decision to keep rates unchanged is a signal that it is comfortable with the current state of the UAE economy and does not see any need to make any changes to its monetary policy.

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U.S. central bankers expect to raise interest rates one more time this year, to 5.6%. However, they now expect to cut interest rates less aggressively in 2024 than they had previously anticipated. This suggests that the US economy is slowing down and that the Fed is becoming more concerned about a recession.

Overall, the CBUAE's decision to keep interest rates unchanged is a sign of stability in the UAE economy. It is also a sign that the CBUAE is closely aligned with the US Federal Reserve and is likely to continue to follow its lead in the months and years ahead.

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