On Wednesday, the UAE Central Bank announced that it will maintain the overnight deposit facility (ODF) rate at 4.40%. This decision aligns with the US Federal Reserve’s recent move to keep interest rates unchanged. The UAE, with its peg to the US dollar, adheres to the US’s monetary policy.
The central bank’s rate decision is significant, as it impacts the overall financial stability and liquidity of the UAE’s banking system. By maintaining the ODF rate, the UAE Central Bank ensures that banks can access overnight funds at a stable rate, which, in turn, helps manage short-term liquidity in the market.
This decision also signals the UAE’s commitment to maintaining the stability of the dirham and its close alignment with the US dollar. The dirham’s peg to the dollar has been an essential aspect of the UAE’s monetary policy for several decades, helping to attract foreign investment and maintain confidence in the country’s financial sector. 
In the US, the Federal Reserve’s decision to hold rates is part of its ongoing efforts to support economic growth while managing inflation. Similarly, the UAE’s central bank aims to create a favorable environment for businesses and consumers by maintaining stable interest rates.
With global economic conditions continuously evolving, the decisions of the UAE Central Bank remain closely monitored by investors, businesses, and analysts who depend on the stability of the country’s monetary and fiscal policies.
