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Central banks raised interest rates by 25 basis points on Thursday, following the U.S. Federal Reserve's decision to raise the interest rate by the same amount, in a move that reflects the impact of the U.S. decision on other money markets.
The Central Bank of Bahrain decided to raise the overnight interest rate from 4.25% to 4.50%, effective from Thursday.
The Central Bank of the UAE also raised the base rate on overnight deposit facilities from 3.65% to 3.90%, effective from Thursday.
Qatar Central Bank decided to raise the deposit interest rate, lending interest rate, and repurchase rate by 25 basis points.
The Saudi Central Bank announced raising the repurchase agreement rate (repo) by 25 basis points to 4.50%, and also raised the reverse repurchase agreement rate (reverse repo) by the same amount to 4.00%.
The Omani Central Bank also decided to raise the repurchase rate with local banks by 25 basis points, to 4.50%, effective from Thursday.
In the currency markets, the dollar rose against the euro on Wednesday, following the Fed's decision to raise interest rates and hint at further increases in borrowing costs in the coming months.
The euro fell 0.2% against the U.S. dollar to $1.15173.
The U.S. Federal Reserve raised the overnight interest rate by 25 basis points to a range of 3.75%-4.00% on Wednesday.
The Fed noted that the decision to raise interest rates will support the return of inflation to the target rate of 2% sooner, noting that inflation remains high.
The vote on the decision was unanimous, and the Council hinted at further increases in interest rates in the coming months.
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