Bank interest rates still double of Eibor

Some banks in the UAE are still offering rates more than double the Emirates Inter-bank Offered Rate (Eibor) for deposits. While Commercial Bank International (CBI) offers rates of seven per cent, the Abu Dhabi-based ADCB is inviting one-year deposit at rates of up to six per cent and Emirates NBD of up to five per cent.

Interbank rates, which normally stay higher than any deposit rates in any markets, are much lower than the rates offered by certain UAE banks on deposits.

Against the high deposits rates, the one-year Eibor is three per cent whereas the corresponding Libor is 1.6 per cent. The three-month and six-month Eibor are 2.46 per cent and 2.8 per cent, respectively. In a matter of about five months, Eibor has fallen by approximately 50 per cent from a high of five per cent.