Riyadh — The Saudi Central Bank (SAMA) decided to raise the rate of “repo” agreements by 0.5% (from 1.25% to 1.75%).
SAMA also raised the “reverse repo” agreements rate by 0.5% (from 0.75% to 1.25%) as part of the Bank’s efforts to maintain monetary and financial stability.
This decision was taken after the US Federal Reserve Board’s announcement on May 4, 2022, to an increase by 50 basis points for IORB. The Interest on Reserve Balances (IORB).
The SAMA Base Rate is anchored to the US Federal Reserve’s IORB. This increase signals the general outlook of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.
The UAE Central Bank also raised the Base Rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points. The new rates will apply from Thursday, May 5, 2022.
The Central Bank of Kuwait (CBK) also raised its discount rate from 1.75 percent to 2.00 percent, effective May 5.