RIYADH — The Saudi Central Bank (SAMA) decided to raise the rate of "repo" agreements by 0.5% (from 1.25% to 1.75%).

SAMA also raised the rate of "reverse repo” agreements by 0.5% (from 0.75% to 1.25%), as part of the Bank's efforts to maintain monetary and financial stability.

This decision was taken after the US Federal Reserve Board’s announcement on 4th May 2022 to increase the Interest on Reserve Balances (IORB) by 50 basis points.

The Base Rate, which is anchored to the US Federal Reserve’s IORB, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates.

The UAE Central Bank also has decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 50 basis points, effective from Thursday, May 5 2022.

Meanwhile, the Central Bank of Kuwait (CBK) has raised the discount rate from 1.75 percent to 2.00 percent effective May 5. — SG