MANAMA: The Central Bank of Bahrain (CBB) yesterday cut its key policy interest rate by 25 basis points. The key policy interest rate on the one-week deposit facility was cut from 2.75 per cent to 2.50pc.
The CBB also decided to cut the overnight deposit rate from 2.50pc to 2.25pc, the one-month deposit rate from 3.10pc to 2.85pc and the lending rate from 4.50pc to 4.25pc. This follows the US Federal Reserve
lowering interest rates for the first time since the Great Recession in 2008 to help stave off the possibility of an economic downturn. US interest rates, which affect the cost of borrowing for credit cards and
mortgages, are now set to hover between 2pc and 2.25pc. When the CBB last revised interest rates in December 2018, raising them by 25 basis points then, Bahrain Centre for Strategic, International and
Energy Studies (Derasat) director of economics and energy studies Dr Omar Al Ubaydli had told the GDN that the kingdom operates a
fixed exchange rate with the US dollar. "This means that Bahrain's monetary policy, including its interest rate policy, must be closely tied to the US monetary policy. The US Federal Reserve increased interest
rates on Wednesday, due to the continuing strength of the US economy, as the Federal Reserve wishes to ensure that consumer price inflation stays under control," he had added.
&uuid=(email))