The Central Bank of the UAE (CBUAE) has left interest rates unchanged following the US Federal Reserve’s decision yesterday, maintaining its overnight deposit rate at 5.40% and the overnight lending rate at 5.90%, state news agency Wam reports.

REMEMBER- The UAE’s overnight deposit rate, or the base rate on overnight deposit facilities, is anchored to the US Federal Reserve’s interest rates as the AED is pegged to the USD.

Analysts are expecting three rate cuts this year, but Fed Chair Jerome Powell statement (pdf) accompanying yesterday’s decision leaves the timing of a rate cut unclear.

Market reax: The decision left US stock exchanges mixed, with the S&P 500 ending the day lower 0.34%, after a brief rally that followed statements from Powell that pushed back against the possibility of a rate hike as the Fed’s next move. The Nasdaq also fell 0.33%.

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