Tuesday, July 16, 2024
Today’s News

After the US Fed’s move, GCC Banks Maintain stable Interest Rates for the Seventh Consecutive Period.

RIYADH: The Gulf Cooperation Council’s central banks have maintained interest rates at the 5.25–5.50 percent benchmark set by the US Federal Reserve for the seventh consecutive period.

Because the majority of the regional currencies are linked to the US dollar, monetary policies in the Gulf are influenced by decisions made in Washington, which is why officials haven’t changed the rate since July.

This decision implies that the Saudi Central Bank, also known as SAMA, will keep its repo rates at the present six percent level. Furthermore, the central banks of Qatar and the United Arab Emirates followed the Fed’s lead by setting their repo rates at 6% and 5.40 percent, respectively. Bahrain, Oman, and Kuwait’s central banks followed the appropriate procedure.

Repo rates highlight the close economic ties and financial dynamics between the GCC countries and the global economy, particularly the US. Repo rates are a type of short-term borrowing that primarily involves government securities.

Given the robust non-oil economy and the sovereign authority funding large-scale projects, high interest rates are unlikely to impede economic growth. Furthermore, because the Riyal is tied to the US dollar, the KSA believes that the USD will continue to be strong, which should keep imports affordable.

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Tuesday, July 16, 2024

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