The Central Bank of the UAE (CBUAE) has kept its benchmark base interest rate unchanged at 3.9% following the US Federal Reserve’s decision to maintain its interest rate.
Announced on October 28, 2026, the decision maintains the rate applicable to the Central Bank’s Overnight Deposit Facility (ODF) at 3.9%. The CBUAE also kept the rate for short-term borrowing through its standing credit facilities at 50 basis points above the base rate, leaving it at 4.4%. <Cite refs={[“turn796069search0″,”turn796069search2”]} />
Why has the UAE kept rates unchanged?
The UAE’s base rate is anchored to the US Federal Reserve’s Interest Rate on Reserve Balances (IORB). The arrangement reflects the close link between the two countries’ monetary policies under the UAE dirham’s fixed exchange rate against the US dollar.
The base rate signals the general direction of monetary policy and serves as an effective floor for overnight money market interest rates in the UAE. By maintaining the rate, the Central Bank has kept its benchmark unchanged following the latest US decision. <Cite refs={[“turn796069search0″,”turn796069search5”]} />
What does the decision mean for borrowers?
The unchanged rate means the latest decision does not, by itself, trigger a change in the CBUAE’s benchmark. However, the effect on personal loans, mortgages and business financing depends on the terms agreed with individual banks.
Borrowers with variable-rate loans should check whether their financing is linked to the base rate, the Emirates Interbank Offered Rate (EIBOR) or another benchmark. Rates linked to EIBOR can move independently of the base rate, and any adjustment will depend on the loan agreement and its repricing schedule.
Fixed-rate borrowers generally remain subject to the agreed rate during the fixed-rate period. Banks may also adjust lending and deposit rates according to their own funding costs, pricing policies and customer agreements.
What expatriates should know
For expatriates living in the UAE, the decision provides no immediate signal of a change in the central bank’s benchmark rate. Those planning to take out a mortgage, personal loan or business financing should compare the annual interest rate, fees, repayment terms and conditions for future rate adjustments.
The latest decision does not guarantee that all borrowing costs will remain unchanged. Consumers should review their loan agreements and consult their banks to understand whether any future benchmark movement could affect monthly repayments.
The CBUAE’s decision keeps the base rate at 3.9% and the rate on standing credit facilities at 4.4%, maintaining the UAE’s alignment with the latest US Federal Reserve decision.
