Saudi Arabia, UAE central banks lower interest rates after Fed cut

Saudi Arabia cut its benchmark interest rates by 25 basis points. (File photo: AFP)

The Saudi Arabian Monetary Authority (SAMA), the Kingdom’s central bank, cut on Wednesday benchmark interest rates following the US Federal Reserve’s decision to reduce its key interest rates for the second time this year.

Saudi Arabia cut its repo rate by 25 basis points from 2.75 percent to 2.50 percent, and the reverse repo rate by 25 basis points from 2.25 percent to 2.00 percent, SAMA said in a statement.

The authority “said the decision is consistent with SAMA’s objective of preserving monetary stability amid “evolving developments in global financial markets.”

The Central Bank of the United Arab Emirates also lowered its repo rate and certificates of deposits rate by 25 basis points.

The US Federal Reserve’s policy-setting Federal Open Market Committee on Wednesday lowered the policy interest rate by 25 basis points to a target range of 1.75 to 2.0 percent.

Central Bank policymakers in the Gulf Cooperation Council (GCC) largely move in line with the US to protect their currencies’ peg to the dollar.

Last Update: Wednesday, 20 May 2020 KSA 10:00 - GMT 07:00