RIYADH: The Saudi central bank, known as SAMA, increased key rates by 25 basis points on Wednesday, it said in a statement, following the Federal Reserve’s move to raise US interest rates by a quarter of a percentage point.
The repo rate was increased to 6 percent and the reverse repo rate was raised to 5.5 percent, the central bank statement said.
Most Gulf central banks also increased their key interest rates on Wednesday after the Federal Reserve’s decision, citing still-elevated inflation as a rationale for the latest hike.
The Fed raised its rate by 25 basis points (bps) on Wednesday and left the door open to another increase.
Oil and gas exporters in the Gulf tend to follow the Fed’s lead on rate moves as most regional currencies are pegged to the US dollar; only the Kuwaiti dinar is pegged to a basket of currencies, which includes the dollar.
However, regional economies have been largely shielded from stubbornly high inflation, and a Reuters poll in April showed that inflation in the region was expected to be between 2.1 percent and 3.3 percent this year and fall lower in 2024.
The UAE central bank also mirrored the Fed move, as did Qatar, Kuwait and Bahrain, although the latter left two rates out of four unchanged.
“The Central Bank of the UAE has decided to raise the Base Rate applicable to the Overnight Deposit Facility by 25 basis points – from 5.15 to 5.40 percent, effective from Thursday,” it said in a statement issued by state news agency WAM.
The CBUAE also has decided to maintain the rate applicable to borrowing short-term liquidity from the CBUAE through all standing credit facilities at 50 basis points above the Base Rate, it added.
The Base Rate, which is anchored to the US Federal Reserve’s Interest on Reserve Balances, signals the general stance of the CBUAE’s monetary policy. It also provides an effective interest rate floor for overnight money market rates in the UAE, the statement also said.
Qatar also increased its main rates by 25 bps, taking the lending interest rate to 6.25 percent, the deposit interest rate to 5.75 percent and the repo rate to 6 percent, while Bahrain raised the one-week deposit rate to 6.25 percent and the overnight deposit rate to 6 percent.
The Central Bank of Kuwait increased its discount rate by 25 bps to 4.25 percent from 4 percent, and said in a statement it wants to remain supportive of economic growth, particularly in non-oil sectors.
(With Reuters)
Saudi, Gulf central banks raise key interest rates by 25bps, mirroring Fed
https://arab.news/c6bgm
Saudi, Gulf central banks raise key interest rates by 25bps, mirroring Fed
Lebanese social entrepreneur Omar Itani recognized by Schwab Foundation
- FabricAID co-founder among 21 global recipients recognized for social innovation
DAVOS: Lebanon’s Omar Itani is one of 21 recipients of the Social Entrepreneurs and Innovators of the Year Award by the Schwab Foundation for Social Entrepreneurship.
Itani is the co-founder of social enterprise FabricAID, which aims to “eradicate symptoms of poverty” by collecting and sanitizing secondhand clothing before placing items in stores in “extremely marginalized areas,” he told Arab News on the sidelines of the World Economic Forum in Davos, Switzerland.
With prices ranging from $0.25 to $4, the goal is for people to have a “dignified shopping experience” at affordable prices, he added.
FabricAID operates a network of clothing collection bins across key locations in Lebanon and Jordan, allowing people to donate pre-loved items. The garments are cleaned and sorted before being sold through the organization’s stores, while items that cannot be resold due to damage or heavy wear are repurposed for other uses, including corporate merchandise.
Since its launch, FabricAID has sold more than 1 million items, reached 200,000 beneficiaries and is preparing to expand into the Egyptian market.
Amid uncertainty in the Middle East, Itani advised young entrepreneurs to reframe challenges as opportunities.
“In Lebanon and the Arab world, we complain a lot,” he said. Understandably so, as “there are a lot of issues” in the region, resulting in people feeling frustrated and wanting to move away. But, he added, “a good portion of the challenges” facing the Middle East are “great economic and commercial opportunities.”
Over the past year, social innovators raised a combined $970 million in funding and secured a further $89 million in non-cash contributions, according to the Schwab Foundation’s recent report, “Built to Last: Social Innovation in Transition.”
This is particularly significant in an environment of geopolitical uncertainty and at a time when 82 percent report being affected by shrinking resources, triggering delays in program rollout (70 percent) and disruptions to scaling plans (72 percent).
Francois Bonnici, director of the Schwab Foundation for Social Entrepreneurship and a member of the World Economic Forum’s Executive Committee, said: “The next decade must move the models of social innovation decisively from the margins to the mainstream, transforming not only markets but mindsets.”
Award recipients take part in a structured three-year engagement with the Schwab Foundation, after which they join its global network as lifelong members. The program connects social entrepreneurs with international peers, collaborative initiatives, and capacity-building support aimed at strengthening and scaling their work.
