UAE - Mubasher: The Central Bank of the UAE (CBUAE) has increased the base rate applicable to the overnight deposit facility (ODF) by five basis points, effective from 17 June 2021.

The new base rate set by the central bank is 15 basis points, according to a press release on Thursday.

This step was taken after the US Federal Reserve Board had announced yesterday an increase in the interest on excess reserves (IOER) by 5 basis points.

The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity through all standing credit facilities at 50 basis points above the base rate. 

Related to the US Federal Reserve’s IOER, the base rate reflects the general stance of the CBUAE’s monetary policy and provides an effective interest rate floor for overnight money market rates.