The United Arab Emirates central bank said on Thursday it was raising interest rates on its certificates of deposit, its main policy instrument, by 25 basis points.
The announcement came after the US Federal Reserve on Wednesday raised interest rates by a quarter point and signalled a faster pace of increases in 2017.
A rise in policy rates is expected to have a knock-on effect on business and consumer loans, making them slightly more expensive.
With the UAE central bank now offering an additional 25 basis points on the money banks deposit with it, most banks are expected to add that margin to their lending rates.
Qatar's central bank too said on Thursday it was raising policy rates by 25 basis points, the official Qatar News Agency reported.
The overnight lending rate rose to 4.75 per cent and the overnight deposit rate rose to 1.00 per cent.
The maturity of the repo rate for public debt securities was changed to seven days from 14 days and the rate was adjusted to 2.25 per cent, the central bank said without elaborating.
