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GCC central banks raise rates

|By Arabian Post Staff| Central banks in the Gulf raised the interest rates within 24 hours of the US Fed announcing a quarter percent rate hike as their currencies are linked to the dollar. At least four central banks announced the hike.


 “We have an advantage over other emerging markets because the currencies are pegged,” so there are fewer foreign exchange risks, said Nabil Farhat, an Abu Dhabi-based partner at Al Fajr Securities was quoted by Bloomberg as saying. “Even before the Fed increased the interest rate, banks had picked up the pace of raising interbank rates” because they want to attract as many deposits from outside as they can, he said.

The three-month Emirates Interbank Offer Rate is at the highest in more than two years, and a similar rate in Saudi Arabia soared the most seven years in percentage terms on Thursday.