The UAE Central Bank reduced its benchmark interest rate by 25 basis points, after the US Federal Reserve’s move on Wednesday to cut rates to stimulate economic activity as inflationary pressures subside.
The banking regulator reduced its base rate for the overnight deposit facility to 4.40 per cent, effective from Thursday. It maintained the interest rate applicable to borrowing short-term liquidity from the regulator at 50 basis points above the base rate for all standing credit facilities, the regulator said on Wednesday.
This move aligns with the Fed’s decision on Wednesday to lower the interest rate on reserve balances by 25 basis points.
The UAE Central Bank base rate, which is anchored to the Fed's interest on reserve balances, signals the general stance of the Central Bank's monetary policy and provides an effective interest rate floor for overnight money market rates in the UAE.
The UAE Central Bank typically aligns its interest rate decisions with those of the Fed because of the dirham's peg to the US dollar.
The Fed began its easing cycle with a 50 basis points cut in September on slowing inflation after keeping rates at a 22-year high for more than a year. Last month, it lowered the interest rate on reserve balances by 25 basis points.
The US entered a monetary easing cycle as the Fed aimed to prevent a recession and guide the world’s largest economy to a soft landing.
This decision reflects the Fed's confidence that "elevated levels of inflation are not overly concerning", Srijan Katyal, global head of strategy and client services at Abu Dhabi-based international securities brokerage ADSS.
“The Fed appears to have dispatched of inflationary worries surrounding Trump’s election win, which fueled higher US yields, a stronger dollar and surging stocks."
Rate cut will likely further boost risk assets helping stocks build on year-to-date rallies with potential for small cap stocks to continue to make up ground on tech heavy names, as Trump policies would support local businesses through tax cuts and protectionist policy, Mr Katyal added.
Economic impact
The UAE continues to prioritise diversifying its economy away from oil, with growth in the non-oil sector accelerating in recent quarters.
The country’s economy is now projected to expand by 4 per cent this year, a slight upward revision from the 3.9 per cent forecast in June, according to the latest report by the UAE Central Bank.
The regulator also lowered its inflation forecast for 2024 to 2.2 per cent, down from an earlier estimate of 2.3 per cent. The Central Bank, in September, noted that inflation forecasts could be revised downward if disinflationary trends in food, beverages, and key non-tradable components persist.
The UAE's economy grew by 3.4 per cent in the first quarter, with real GDP reaching Dh430 billion ($117.08 billion), according to preliminary estimates from the Federal Competitiveness and Statistics Centre, cited by the Ministry of Economy in September. The non-oil sector recorded a 4 per cent year-on-year expansion during the period, reflecting continued momentum in the country’s diversification efforts.
Gulf economies follow Fed rates
Most Gulf central banks align their policy rate changes with the Fed, as their currencies are pegged to the US dollar. Kuwait is the exception among the six-member economic GCC bloc, as its dinar is linked to a basket of currencies.
Despite experiencing much lower inflation than other regions, these oil-rich economies kept pace with the Fed’s aggressive rate increase cycle.
The Saudi Central Bank, better known as Sama, on Wednesday matched the Fed rate cut, reducing its repurchase agreement (repo) rate by 25 basis points to 5 per cent and its reverse repo rate by the same basis points to 4.5 per cent.
The Qatar Central Bank reduced the repo rate by 30 basis points to 4.85 per cent. It also reduced its deposit rate to 4.60 per cent, and the lending rate to 5.10 per cent.
The Central Bank of Bahrain cut its key rate on overnight deposits by 25 basis points to 5 per cent, effective Thursday. The CBB said that the move is part of its measures to maintain monetary and financial stability in light of global financial market developments.
The Central Bank of Kuwait said it adopted a “gradual and balanced approach in adjusting the discount rate, ensuring alignment with the local economic conditions, maintaining macroeconomic stability, and enhancing sustainable growth”. It reduced its discount rate by 25 basis points to 4 per cent as of Thursday.
In the Gulf region, home to one third of the world’s proven oil reserves, government spending is primarily driven by oil prices rather than monetary policy.
Economies such as Saudi Arabia, the world’s largest oil exporter, and the UAE, the Arab world’s second-largest economy, are investing tens of billions of dollars in projects aimed at economic diversification. These initiatives are often funded through a mix of government equity, commercial loans and project bonds.
SERIE A FIXTURES
Saturday Spezia v Lazio (6pm), Juventus v Torino (9pm), Inter Milan v Bologna (7.45pm)
Sunday Verona v Cagliari (3.30pm), Parma v Benevento, AS Roma v Sassuolo, Udinese v Atalanta (all 6pm), Crotone v Napoli (9pm), Sampdoria v AC Milan (11.45pm)
Monday Fiorentina v Genoa (11.45pm)
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How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
CHELSEA'S NEXT FIVE GAMES
Mar 10: Norwich(A)
Mar 13: Newcastle(H)
Mar 16: Lille(A)
Mar 19: Middlesbrough(A)
Apr 2: Brentford(H)
SHAITTAN
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Specs
Engine: Electric motor generating 54.2kWh (Cooper SE and Aceman SE), 64.6kW (Countryman All4 SE)
Power: 218hp (Cooper and Aceman), 313hp (Countryman)
Torque: 330Nm (Cooper and Aceman), 494Nm (Countryman)
On sale: Now
Price: From Dh158,000 (Cooper), Dh168,000 (Aceman), Dh190,000 (Countryman)
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Zidane's managerial achievements
La Liga: 2016/17
Spanish Super Cup: 2017
Uefa Champions League: 2015/16, 2016/17, 2017/18
Uefa Super Cup: 2016, 2017
Fifa Club World Cup: 2016, 2017
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The burning issue
The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE.
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Read part one: how cars came to the UAE
The five pillars of Islam
Dubai World Cup prize money
Group 1 (Purebred Arabian) 2000m Dubai Kahayla Classic - $750,000
Group 2 1,600m(Dirt) Godolphin Mile - $750,000
Group 2 3,200m (Turf) Dubai Gold Cup – $750,000
Group 1 1,200m (Turf) Al Quoz Sprint – $1,000,000
Group 2 1,900m(Dirt) UAE Derby – $750,000
Group 1 1,200m (Dirt) Dubai Golden Shaheen – $1,500,000
Group 1 1,800m (Turf) Dubai Turf – $4,000,000
Group 1 2,410m (Turf) Dubai Sheema Classic – $5,000,000
Group 1 2,000m (Dirt) Dubai World Cup– $12,000,000
Brief scores:
Manchester City 3
Aguero 1', 44', 61'
Arsenal 1
Koscielny 11'
Man of the match: Sergio Aguero (Manchester City)
Manikarnika: The Queen of Jhansi
Director: Kangana Ranaut, Krish Jagarlamudi
Producer: Zee Studios, Kamal Jain
Cast: Kangana Ranaut, Ankita Lokhande, Danny Denzongpa, Atul Kulkarni
Rating: 2.5/5
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Sudden change in behaviour or displays higher levels of stress or anxiety
Shows signs of depression or isolation
Ability to sleep well diminishes
Academic performance begins to deteriorate
Changes in eating habits
Struggles to concentrate
Refuses to go to school
Behaviour changes and is aggressive towards siblings
Begins to use language they do not normally use
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
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Title: General Practitioner with a speciality in cardiology
Previous jobs: Worked in well-known hospitals Jaslok and Breach Candy in Mumbai, India
Education: Medical degree from the Government Medical College in Nagpur
How it all began: opened his first clinic in Ajman in 1993
Family: a 90-year-old mother, wife and two daughters
Remembers a time when medicines from India were purchased per kilo
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Penguin Modern Classics
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The Specs
Price, base Dh379,000
Engine 2.9-litre, twin-turbo V6
Gearbox eight-speed automatic
Power 503bhp
Torque 443Nm
On sale now
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Result
Qualifier: Islamabad United beat Karachi Kings by eight wickets
Fixtures
Tuesday, Lahore: Eliminator 1 - Peshawar Zalmi v Quetta Gladiators
Wednesday, Lahore: Eliminator 2 – Karachi Kings v Winner of Eliminator 1
Sunday, Karachi: Final – Islamabad United v Winner of Eliminator 2
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PROFILE OF CURE.FIT
Started: July 2016
Founders: Mukesh Bansal and Ankit Nagori
Based: Bangalore, India
Sector: Health & wellness
Size: 500 employees
Investment: $250 million
Investors: Accel, Oaktree Capital (US); Chiratae Ventures, Epiq Capital, Innoven Capital, Kalaari Capital, Kotak Mahindra Bank, Piramal Group’s Anand Piramal, Pratithi Investment Trust, Ratan Tata (India); and Unilever Ventures (Unilever’s global venture capital arm)
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Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
Zayed Sustainability Prize
Sri Lanka Test squad:
Dimuth Karunaratne (stand-in captain), Niroshan Dickwella (vice captain), Lahiru Thirimanne, Kaushal Silva, Kusal Mendis, Kusal Janith Perera, Milinda Siriwardana, Dhananjaya de Silva, Oshada Fernando, Angelo Perera, Suranga Lakmal, Kasun Rajitha, Vishwa Fernando, Chamika Karunaratne, Mohamed Shiraz, Lakshan Sandakan and Lasith Embuldeniya.
