Saudi Arabia, Gulf peers raise interest rates after US Fed hike
- Saudi Arabia and several Gulf countries raised key interest rates by 25 basis points following the US Federal Reserve's hike, in line with the need to maintain monetary and exchange-rate stability.
- The Saudi Central Bank increased its repurchase agreement rate to 4.5% and its reverse repo rate to 4% to ensure monetary stability.
- Gulf countries typically adjust their rates in tandem with the Federal Reserve due to their currencies being pegged to the US dollar.
- Higher repo and reverse repo rates may increase borrowing costs, affecting businesses and households due to their reliance on interbank rates like SIBOR.
