Wednesday, June 14, 2017

HK, Saudi, UAE, Bahrain raise rates but Kuwait on hold

     The central banks of Hong Kong, Saudi Arabia,  the United Arab Emirates (UAE) and Bahrain raised their key interest rates by 25 basis points, tracking a similar rate hike earlier today by the U.S. Federal Reserve.
      However, the Central Bank of Kuwait (CBK) left its benchmark discount rate at 2.75 percent and would continue to employ tools and procedures to maintain the attractiveness of its dinar.
      While Kuwait pegs its dinar to a weighted basket of currencies, the other five members of the  Gulf Cooperation Council (GCC) - Saudi Arabia, Bahrain, Oman, the UAE and Qatar - peg their currencies to the U.S. dollar and normally adjust their rates in synch with the U.S central bank.
     The Hong Kong Monetary Authority (HKMA), the de-facto central bank of Hong Kong, also pegs its Hong Kong dollar to the U.S. dollar and tracks changes to U.S. rates.
      The HKMA adjusted upward its base rate by 25 basis points to 1.50 percent with immediate effect following the 25-basis-point upward shift in the target range for the U.S. federal funds rate.
      The Central Bank of the UAE (CBUAE) said it would raise its rate on certificates of deposit - the key policy instrument through which changes are transmitted to the UAE banking system - by 25 basis points.
      The Saudi Arabia Monetary Authority (SAMA) raised its reverse repo rate to 1.25 percent from 1.00 percent with immediate effect while it kept the repo rate at 2.00 percent, in line with recent developments in international financial markets.

     www.CentralBankNews.info

 

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