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Most Gulf bourses end higher as investors weigh Fed rate hike
Interest RatesInflationMonetary Policy
Most Gulf bourses closed higher on Thursday despite mounting geopolitical friction, as investors weighed the U.S. Federal Reserve’s first interest rate hike in more than three years. Most Gulf Cooperation Council central banks raised their benchmark rates after the US Fed’s quarter-point increase on Wednesday. Regional currencies are pegged to the dollar, except for the Kuwaiti dinar, which is tied to a basket that includes the dollar, so Gulf monetary policy routinely mirrors the Fed. Saudi Arabia raised its repo and reverse repo rates by 25 basis points to 4.50% and 4.00%, respectively. The United Arab Emirates raised its overnight deposit facility base rate by 25 bps to 3.9%, while Oman raised its repo rate by the same margin to 4.5%. Qatar’s central bank also raised key rates by 25 bps. Low shipping traffic through the Strait of Hormuz continued to weigh on sentiment, while attention remains fixed on U.S. President Donald Trump’s planned meeting with Gulf leaders next week. Still, strong local fundamentals could continue to underpin markets, said Milad Azar Market analyst at XTB MENA.
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