(P)GCC States Rush  to Raise Interest Rates
(P)GCC States Rush  to Raise Interest Rates

(P)GCC States Rush to Raise Interest Rates

(P)GCC States Rush to Raise Interest Rates

The Persian Gulf Arab states’ dollar-pegged economies have followed a US interest rate hike to maintain the value of their currencies but at the risk of denting efforts to stimulate their flagging economies.
Saudi Arabia, the UAE, Qatar and Bahrain all raised their key benchmark interest rates by 25 basis points after the move by the US Federal Reserve late on Wednesday, AFP reported.
Only Kuwait, whose dinar is pegged to a broader basket of currencies, held out, as it battles to boost its economy which is forecast by the International Monetary Fund to shrink by 2.1% this year.
The Saudi central bank said it was raising one of its benchmark rates to 1.5% although that was counterbalanced by a government announcement of $19.2 billion in stimulus funds for the private sector.
The kingdom reported a negative inflation rate in October and economic forecasts say the region’s largest economy is likely to shrink further this year.
The UAE central bank raised its benchmark short-term borrowing rate to 1.5% while Bahrain raised its key rate to 1.75% and Qatar raised its to 2.5%. The Kuwaiti central bank kept its main discount rate at 2.75%. There was no immediate word from Oman.
Raising interest rates is a tool normally used to cool heating economies and check inflation but the Persian Gulf Arab states are suffering from the reverse problem—economic contraction and deflation.
Arab oil exporters have been hit hard by the slump in world prices for crude, which provided a major part of their finances. Huge budget deficits have forced them to cut public spending and seek to restructure their economies away from oil. They have all been keen to boost lending to expand their private sectors.

Short URL : https://goo.gl/FQuwNm
  1. https://goo.gl/4SRzsH
  • https://goo.gl/vhJv5d
  • https://goo.gl/CjfCni
  • https://goo.gl/SBALqC
  • https://goo.gl/qmMCCV

You can also read ...

Bithumb Hacked, $32m in Cryptocurrency Stolen
Cryptocurrencies dropped after the second South Korean...
South Africa GDP Shrinks
South African gross domestic product shrank 2.2% in the first...
Washington in March imposed tariffs of 25% on steel and 10% on aluminum, in a move mainly aimed at curbing imports from China.
Russia said on Tuesday it would impose import duties on US...
Saudi Arabia, which employs about two-thirds of its citizens, is chipping away at a budget deficit that ballooned to almost 16% of GDP after the oil shock of 2014, while FDI slumped more than 80% last year.
Show up, swipe in. The routine is familiar to office workers...
Australian Telecom Co. to Axe 8,000 Jobs
Australia’s dominant telecommunications company Telstra...
Taxes in Italy Drive Economy Underground
Italy grew rapidly over the 20th century, and its black market...
South Korea to Grow 3 Percent
The Organization for Economic Cooperation and Development has...
World Shares Snap Five-Day Losing Streak
World stocks steadied near three-week lows on Wednesday and...

Add new comment

Read our comment policy before posting your viewpoints