GCC Central Banks Raise Rates After US Federal Reserve Hike
Central banks across the Gulf Cooperation Council raised interest rates by 25 basis points following a benchmark rate increase by the US Federal Reserve.
The Federal Open Market Committee voted unanimously on September 17, 2026, to increase the US benchmark interest rate to a target range of 3.75% to 4%. This marks the first rate hike since July 2023 and is intended to return inflation to a 2% goal, supported by strong productivity and resilient domestic spending.
Following the US move, central banks across the Gulf Cooperation Council raised their key interest rates by 25 basis points to maintain monetary stability, as most regional currencies are pegged to the US dollar. The Saudi Central Bank increased its repo rate to 4.50% and reverse repo rate to 4%, while the Central Bank of the UAE raised its base rate to 3.9%.
Similar adjustments occurred across other regional hubs. The Central Bank of Bahrain and the Central Bank of Oman both raised their respective overnight deposit and repo rates to 4.50%. Additionally, the Qatar Central Bank increased its deposit, lending, and repurchase rates by 25 basis points.
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