Saudi Arabia, UAE Cut Key Rates by 50 bps

The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid

Saudi Arabia and the UAE joined the US Federal Reserve on Tuesday and announced reducing key interest rates by 50 bps.

SAMA said that “in light of global developments”, it cut its repo rate, used to lend money to banks, by 50 bps to 1.75%. Besides, cutting its reverse repo rate, at which commercial banks deposit money with the central bank, by 50 bps to 1.25%.

For its part, the UAE central bank said that it cut interest rates on certificates of deposit and its repo rate for borrowing short-term liquidity by 50 bps.

The Fed announced cutting interest rates on Tuesday; this came in a bid to shield the world’s largest economy from the impact of the coronavirus.

According to Reuters, this is Fed’s first emergency cut since 2008 at the height of the financial crisis.