Saudi Arabia, Qatar, Bahrain raise interest rates, mirroring Federal Reserve
The central banks of Saudi Arabia, Qatar and Bahrain raised their key policy rates by 0.25% on Wednesday.
The move came after the US Federal Reserve raised interest rates by the same percentage earlier in the day as it continued to fight inflation.
Other central banks in the Gulf did not immediately release information.
Why it’s important: The Federal Reserve has been raising rates sharply since last year in response to inflation. But the rate hikes are controversial because of the pressure they put on the financial system by making borrowing more expensive. The failure of Silicon Valley Bank earlier this month was partly due to investors becoming more risk averse in response to rising rates.
Adding to global financial concerns, rival UBS bought out Swiss investment giant Credit Suisse on Sunday.
More information: The central banks of the Gulf usually reflect the interest rate decision of the US Federal Reserve. Saudi Arabia, Bahrain, Oman and the United Arab Emirates raised rates in February after the Fed, although Qatar notably decided not to. Kuwait has acted more independently on interest rates in recent years.