The UAE Central Bank cut its overnight deposit rate by 25 basis points to 3.90% on 30 October 2025, following the US Federal Reserve’s similar rate cut, in line with the dirham’s peg to the dollar.
The UAE Central Bank has announced a 25-basis-point reduction in its base rate for overnight deposit facilities, lowering it from 4.15% to 3.90% as of 29 October 2025.
This change, effective 30 October 2025, follows the US Federal Reserve’s decision to cut interest rates by the same margin on Wednesday, marking the second reduction this year.
The UAE aligns its monetary policy with that of the US due to the dirham’s (AED) peg to the US dollar.
Additionally, the Central Bank will maintain the borrowing rate for short-term liquidity at 50 basis points above the base rate for all standing credit facilities. The base rate, tied to the US Federal Reserve’s Interest Rate on Reserve Balances, serves as a key indicator of monetary policy direction and sets a floor for overnight money market rates in the UAE.
This rate cut aims to support the US economy, which is navigating challenges such as the impact of President Donald Trump’s tariffs and the aftermath of a government shutdown.
