CBUAE holds Base Rate at 3.9% after Fed holds 3.75–4% range

The Central Bank of the UAE kept its Base Rate at 3.9% after the US Federal Reserve held its target range at 3.75% to 4% in a 10–2 vote.

28 Oct 2026, 23:28

The Central Bank of the UAE maintained its Base Rate at 3.9% on 28 October after the US Federal Reserve kept the Interest Rate on Reserve Balances unchanged and held its target range at 3.75% to 4%.

• The CBUAE kept the Base Rate applicable to the Overnight Deposit Facility at 3.9%, WAM reported.
• Borrowing short-term liquidity from the CBUAE stays at 50 basis points above the Base Rate for all standing credit facilities.
• The FOMC voted 10–2; Lisa D. Cook and Beth M. Hammack preferred to raise the target range by 1/4 percentage point.
• The Fed kept the interest rate paid on reserve balances at 3.90%, effective 29 October.
• The Base Rate is anchored to the Fed's IORB and provides an effective floor for UAE overnight money market rates.
• Qatar Central Bank also kept its deposit, lending and repo rates at 4.10%, 4.60% and 4.35%.

What happened

The Central Bank of the UAE (CBUAE) has decided to maintain the Base Rate applicable to the Overnight Deposit Facility at 3.9%, the Emirates News Agency (WAM) reported late on Wednesday, 28 October.

The decision was taken following the US Federal Reserve's announcement the same day to keep the Interest Rate on Reserve Balances (IORB) unchanged, according to WAM. The CBUAE also decided to maintain the interest rate applicable to borrowing short-term liquidity from the CBUAE at 50 basis points above the Base Rate for all standing credit facilities.

The Federal Open Market Committee voted 10–2 to maintain the target range for the federal funds rate at 3.75% to 4%. Voting against were Lisa D. Cook and Beth M. Hammack, who, according to the statement, preferred to raise the target range for the federal funds rate by 1/4 percentage point at this meeting.

The committee said economic activity is expanding at a strong pace and that inflation remains elevated, adding that uncertainty remains elevated owing, in part, to geopolitical developments.

In its implementation note, the Fed said its Board of Governors voted unanimously to maintain the interest rate paid on reserve balances at 3.90%, effective 29 October. The New York Fed's desk was directed to conduct standing overnight repurchase agreement operations at 4.0% and overnight reverse repurchase agreement operations at 3.75%, and the primary credit rate was kept at its existing level of 4.0%.

Qatar Central Bank also kept its rates unchanged on Wednesday, the Qatar News Agency reported, citing the bank's official X account: the QCB Deposit Rate remains at 4.10%, the QCB Lending Rate at 4.60% and the QCB Repo Rate at 4.35%.

Why it matters

The Base Rate, which is anchored to the Fed's IORB, signals the general stance of monetary policy and provides an effective floor for overnight money market interest rates in the UAE, according to WAM. The Fed's decision to leave IORB at 3.90% therefore set the course for the CBUAE's own hold.