UAE lowers interest rates by 25 basis points

September 17, 2025 / 11:10 PM

Sharjah 24 – WAM: The Central Bank of the UAE (CBUAE) has announced a 25 basis point cut to the Base Rate applicable to the Overnight Deposit Facility (ODF), reducing it from 4.40% to 4.15%, effective Thursday, 18 September.

Decision follows US Federal Reserve rate cut

The move comes in response to the US Federal Reserve’s decision to reduce the Interest Rate on Reserve Balances (IORB) by 25 basis points, reflecting the CBUAE’s policy alignment with the Fed due to the UAE dirham's peg to the US dollar.

Short-term borrowing rate remains unchanged

The CBUAE also confirmed that the interest rate for borrowing short-term liquidity through all standing credit facilities will remain at 50 basis points above the new Base Rate.

Role of the base rate in monetary policy

Anchored to the US Federal Reserve’s IORB, the Base Rate serves as a key indicator of the UAE’s monetary policy stance and provides an effective floor for overnight money market interest rates.