The Central Bank of the UAE (CBUAE) will increase the Base Rate for the Overnight Deposit Facility (ODF) by 25 basis points, raising it to 5.15 percent from 4.90 percent starting on May 4th, 2023.
This decision comes in response to the US Federal Reserve Board’s announcement on May 3rd, 2023, to increase the Interest on Reserve Balances (IORB) by 25 basis points.
In addition, the CBUAE has chosen to keep the rate for borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points higher than the Base Rate.
The Base Rate, which is tied to the US Federal Reserve’s IORB, indicates the overall position of the CBUAE’s monetary policy and serves as a minimum interest rate limit for overnight money market rates.