Mubasher: The Saudi Central Bank (SAMA) and the Central Bank of the UAE (CBUAE) hiked their key interest rates by 50 basis points after the US Federal Reserve (Fed) announced a 50-basis-point raise on 14 December 2022.

SAMA increased its repo and reverse repo rates by 50 basis points to 5% and 4.50%, respectively, according to an official statement.

Meanwhile, the CBUAE decided to raise the base rate applicable to the overnight deposit facility (ODF) from 3.90% to 4.40%, which became effective on 15 December this year.

Furthermore, the UAE’s central bank maintained the rate applicable to borrowing short-term liquidity through all standing credit facilities at 50 basis points above the base rate.

The Saudi and Emirati central banks’ decisions followed the seventh interest rate hike by the Fed this year. Last September, a 75-basis-point increase was announced.

The Fed reinforced its benchmark rate to a range of 4.25% to 4.50%, marking its highest level in 15 years.

Chairman of the Fed, Jerome Powell, said: "The inflation data in October and November show a welcome reduction. But it will take substantially more evidence to give confidence that inflation is on a sustained downward path."