In response to the US Federal Reserve's recent action, the UAE Central Bank also lowered its rates on Wednesday, with the overnight facility now set at 4.9 per cent.
The UAE, along with other Gulf countries, closely follows US monetary policy due to their currency being pegged to the US dollar, with the exception of Kuwait, whose currency is linked to a basket of global currencies.
The US Federal Reserve reduced interest rates on Wednesday for the first time in over four years, marking the beginning of a reversal of the restrictive measures it had implemented to combat inflation. The Federal Open Markets Committee cut rates by 50 basis points, bringing them down to a range of 4.75 to 5 per cent, anticipating that this move will stimulate consumer spending.
