US central bank to 'continue to monitor' how incoming information will affect economy.
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.
Fellow GCC member Bahrain followed suit. Its central bank decided to cut its one-week deposit facility to 2.50 per cent from 2.75 per cent. It also reduced the overnight deposit rate to 2.25 per cent from 2.5 per cent, and the lending rate to 4.25 per cent from 4.5 per cent.
The Fed cut interest rates, citing concerns about the global economy and muted US inflation, and signalled a readiness to lower borrowing costs further if needed.
Financial markets had widely expected the quarter-percentage-point rate cut, which lowered the US central bank's benchmark overnight lending rate to a target range of 2 per cent to 2.25 per cent.
In a statement at the end of its latest two-day policy meeting, the Fed said it had decided to cut rates "in light of the implications of global developments for the economic outlook as well as muted inflation pressures".
The Fed said it will "continue to monitor" how incoming information will affect the economy, adding that it "will act as appropriate to sustain" a record-long US economic expansion.
The decision drew dissents from Boston Fed president Eric Rosengren and Kansas City Fed president Esther George who argued for leaving rates unchanged. On the opposite flank, US President Donald Trump is likely to be disappointed the Fed did not deliver the large rate cut he had demanded. Trump has repeatedly harangued the central bank and Fed chairman Jerome Powell for not doing enough to help his administration's efforts to boost economic growth.
The US dollar index jumped by 0.22 per cent to 98.264 after the Fed's decision. Against the euro, the dollar was 0.4 per cent stronger, last at $1.111, its strongest level since May 2017.
Wall Street wobbled slightly after the announcement. As at press time, the S&P 500 and Dow Jones were flat, while the Nasdaq inched up 0.1 per cent.ERROR: Macro /ads/dfp-ad-article-new is missing!
نشكركم زوار العرب اليوم على تصفح موقعنا وفى حالة كان لديك اى استفسار بخصوص هذا الخبر Fed cuts rates; UAE, Bahrain follow suit برجاء ابلاغنا او ترك تعليق الأسفل المصدر : khaleejtimes