UAE cuts bank lending rate to 1.5 pct from 2.5 pct

The United Arab Emirates is slashing a key interest rate by a full percentage point in an effort to lower borrowing costs and boost the national economy.

State news agency WAM on Monday quoted Central Bank Chairman Mohammed Sharif Foulathi as saying the liquidity support facility rate will be cut to 1.5 percent from 2.5 percent. The move will be effective Tuesday.

The Arab world's second-largest economy launched the liquidity support facility last year to give banks a new way to borrow money from the central bank, but analysts say lending in the country remains tight.