Gulf central banks lift rates as Fed makes second 75-bps hike | Reuters

Gulf central banks lift rates as Fed makes second 75-bps hike | Reuters

Most Gulf central banks lifted their main interest rates by three quarters of a percentage point on Wednesday, moving with the U.S. Federal Reserve as their currencies are pegged to the dollar.

The Central Bank of Kuwait, the only one of the six Gulf Cooperation Council (GCC) countries that ties its currency to a basket rather than just the dollar, raised its key discount rate by 25 basis points (bps) to 2.5%. read more

The central banks of Saudi Arabia, the United Arab Emirates, Qatar and Bahrain all raised their key rates by 75 bps to 3%, 3.75%, 3% and 3.25%, respectively. read more

"The rates hikes by the GCC central banks continue to show commitment to the regional currency pegs to the USD," said Monica Malik, chief economist at Abu Dhabi Commercial Bank, adding Kuwait's currency basket gave it more monetary flexibility.