The Central Bank of the UAE (CBUAE) has announced an increase in the Base Rate for the Overnight Deposit Facility (ODF) by 25 basis points, bringing it up from 5.15 to 5.40 percent. The new rate will be effective from Thursday, 27th July, 2023.
This decision by the CBUAE comes in response to the US Federal Reserve Board’s recent announcement on 26th July, 2023, to raise the Interest on Reserve Balances (IORB) by 25 basis points.
Additionally, the CBUAE has chosen to maintain the rate for borrowing short-term liquidity from the bank through all standing credit facilities at 50 basis points above the Base Rate.
The Base Rate, which is tied to the US Federal Reserve’s IORB, indicates the general stance of the CBUAE’s monetary policy and serves as a benchmark for overnight money market rates in the UAE.