GCC Central Banks Follow US Fed Rate Hike with Interest Rate Increases

The US Federal Reserve raised its benchmark interest rate to a target range of 3.75% to 4%, prompting central banks across the GCC region to follow suit.

In response, the Central Bank of the UAE (CBUAE) increased the base rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points, from 3.65% to 3.9%, effective September 17th.

The CBUAE also maintained the interest rate applicable to borrowing short-term liquidity from the central bank at 50 basis points above the Base Rate for all standing credit facilities.

The Saudi Central Bank raised its Repo rate by 25 basis points to 4.50% and the reverse repo rate by 25 basis points to 4%, while the Central Bank of Bahrain increased its overnight deposit interest rate by 25 basis points from 4.25% to 4.50%, effective September 17th, 2026.