UAE Central Bank Keeps Base Rate at 3.65% After Fed Pause

The Central Bank of the UAE kept its base rate applied to the overnight deposit facility unchanged at 3.65%, mirroring the US Federal Reserve's decision to hold its benchmark rate steady. Because the UAE dirham is pegged to the US dollar, the central bank's policy rate closely tracks the Fed's moves, so a pause in Washington translates directly into a hold in Abu Dhabi. The base rate anchors overnight liquidity conditions across the UAE banking system and influences the rates banks charge and pay, meaning the steady setting keeps borrowing and deposit costs broadly stable for businesses and consumers. The decision comes as the UAE economy continues to show resilience, supported by strong banking-sector assets, robust liquidity and diversification beyond oil, even as regional geopolitical tension adds uncertainty. Holding the rate in line with the Fed reflects the constraints and benefits of the currency peg, which imports US monetary policy but provides stability and predictability for a major trade and financial hub. With the Fed signaling that its next move could be an increase, UAE borrowers and savers face the prospect of rates staying elevated, tracking whatever path the US central bank ultimately takes.