The Central Bank of the United Arab Emirates has maintained its primary interest rate at 3.65%. The move follows the latest decision by the Federal Reserve. The UAE maintains its monetary policy alignment with the United States because the dirham is pegged to the dollar.
According to the US Federal Reserve, “the UAE central bank will maintain the Base Rate applicable to the Overnight Deposit Facility (ODF) at 3.65 percent. Recent indicators suggest that economic activity has been expanding at a solid pace. The unemployment rate has been little changed in recent months. Inflation is elevated, in part reflecting the recent increase in global energy prices.”
The central bank needs to monitor Federal Reserve interest rate movements. Any separation from established patterns will lead to capital movement disruptions, which will also affect currency stability.
Experts suggest that with greater certainty, corporations can plan investments with greater clarity. Retail borrowers benefit from unchanged loan rates, which include mortgage holders. The banking sector benefits from stable liquidity conditions across the financial network.
The decision reflects a wait-and-watch approach. The economy maintains its growth rate, but international uncertainties continue to affect economic progress. The central bank maintains fixed interest rates, which provide flexibility for future economic developments. Policymakers need to monitor worldwide inflation patterns together with international geopolitical conflicts.
The UAE economy maintains its strength through its ongoing performance. The economy expands through non-oil industries, whereas inflation shows signs of easing. The central bank aims to achieve economic expansion through its efforts to maintain stable prices.
Also read: Abu Dhabi Non-Oil Trade Hits $113B in 2025, up 36% as Exports Surge 63%