* Updated with the response of Gulf banks
On Wednesday, the US Federal Reserve announced a 25 basis point rate hike, after its two-day meeting, in line with expectations.
With this, interest rates in the United States will be in a range between 5 and 5.25%.
This is the third time in a row that the Fed has raised interest rates by 25 basis points.
The decision was taken unanimously by the members. The Fed’s statement implicitly showed the possibility of fixing interest rates in the coming period, although this was not explicitly confirmed. Where the bank did not say that it expects the need for future increases, but rather said that it will monitor the situation to see if the interest rate increase will be appropriate.
The Fed seeks to counter high inflation in America. The annual inflation rate was 5% in March, down from 6% in February, but still well above the US Federal Reserve’s target of 2% in the medium term.
The reaction of the Gulf banks
Most of the Gulf countries peg their currency to the dollar, while Kuwait pegs its currency to a basket of currencies, including the dollar.
The Central Bank of Saudi Arabia and the UAE, as well as the Central Bank of Bahrain, announced a 25 basis point hike in the main interest rate.
While the Qatari Central Bank decided to fix the main interest rates, it said in a statement that it aims to “have current interest rates at appropriate levels to support economic growth.”
(Prepared by: Shaima Hefzy, Edited by: Yasmine Saleh, to communicate with [email protected])
#economic news
To read the topic on Icon, click here
To subscribe to our daily report that includes developments in economic and political news, register here
2023-05-03 18:12:27
#Updated #Federal #Reserve #raises #interest #rates #basis #points
