Consumers in the UAE will pay less to borrow money in 2024 as interest rates are expected to fall by 100 basis points.
Interest rates on personal loans, mortgages, car financing and credit cards are set to fall next year as the US Federal Reserve and the Central Bank of the United Arab Emirates will cut interest rates amid low inflation in the world’s largest economy, analysts said.
The UAE pegs its currency to the US dollar as a result, the central bank tends to emulate the Fed’s stance on monetary policy and therefore, when the Fed cuts interest rates next year, the UAE is expected to follow suit.
The Fed kept interest rates steady at a 22-year high between 5.25 and 5.50 percent at the last meeting of the year this month.
Similarly, the UAE central bank also kept the key interest rate applied to overnight deposit facilities unchanged at 5.40 per cent in line with the Fed’s decision.
The regulator also kept the interest rate applied to borrow short-term liquidity from the central bank at 50 basis points above the base rate for all permanent credit facilities.
Interest rates have been continuously rising in the United Arab Emirates and the United States after the pandemic in order to rein in the decades-old high inflation in the United States.
