US Interest Rates Hiked For The 4th Time In 2022
Riyadh/Abu Dhabi/Manamah/Kuwait/Qatar — The central banks of Saudi Arabia, the United Arab Emirates, Bahrain, Kuwait, and Qatar raised their interest rates on Wednesday.
The announcement by the five GCC countries came following the US Federal Reserve’s decision to raise the primary interest rate by 75 basis points to 2.5%.
The Saudi Central Bank (SAMA) announced that it would raise the rate of repurchase agreements (Repo) by 75 basis points from 2.25 to 3.00%.
Also, SAMA has raised the rate of reverse repurchase agreements by 75 basis points, from 1.75 to 2.50%,
SAMA stated that the decision is consistent with its goals of maintaining monetary and financial stability given the global developments.
Meanwhile, the Central Bank of the United Arab Emirates (CBUAE) announced that it would raise the base rate by 75 basis points starting from Thursday, July 28, 2022. CBK, the Central Bank of Kuwait, extend the discount rate to 2.50% from 2.25% as of Friday.
The Qatar Central Bank (QCB) also decided to raise interest rates on July 28. The bank will raise the deposit rate (QCBDR) by 75 basis points to 3.00%.
And increase the lending interest rate by 50 basis points to 3.75%. QCB decided to raise Repo Rate by 75 basis points to 3.25%.
CBB, the Central Bank of Bahrain, increased the basic interest rate on one-week deposits from 2.50% to 3.25%. Additionally, it increased the interest rate on overnight deposits from 2.25% to 3.00%. And raised the interest rate on deposits for a four-week period from 3.25% to 4.00%.
The CBB also decided to raise the interest rate imposed by the Central Bank of Bahrain on retail banks in return for lending facilities from 3.75% to 4.50%.
Recommended: How To Get Employment (Job) In Saudi Arabia
The Federal Reserve raised interest rates for the fourth time this year, and by 75 basis points, the second time in a row.
“Recent indicators of production and spending have softened. In a press release, growth in consumer spending has slowed significantly, in part reflecting lower real disposable income and tighter financial conditions,” the FOMC stated.
“Despite these developments, the labor market has remained extremely tight, with the unemployment rate near a 50-year low, job vacancies near historical highs, and wage growth elevated,” the FOMC said.
“During the past three months, employment rose by an average of 375,000 jobs per month, down from the average pace seen earlier in the year but still robust,” the statement clarified.
The agencies stated that US central bankers moved aggressively to cool the most substantial surge in inflation in more than four decades. Without derailing the world’s largest economy.
