10:41 22Nov07 RTRS-UNITED ARAB EMIRATES CENTRAL BANK CUTS 6-18 MONTH CERTIFICATE OF DEPOSIT RATES BY AS MUCH AS 20 BPS
10:58 22Nov07 RTRS-UAE cuts interest rates as dirham pressure mounts
DUBAI, Nov 22 (Reuters) – The United Arab Emirates central
bank cut its certificate of deposit rates by as much as 20 basis
points on Thursday after investors piled pressure on the
dollar-pegged dirham currency to appreciate.
The central bank cut its six-month and nine-month
certificate of deposit rates by 10 basis points to 4.40 percent
and 4.30 percent respectively, the 12-month rate by 15 basis
points to 4.15 percent and the 18-month rate by 20 basis points
to 4 percent.
The central bank has no benchmark rate. Banks use the
certificates as a guide for lending on the interbank market.
Investors have been pressing the central bank to let the
dirham appreciate against the U.S. dollar after Governor Sultan
Nasser al-Suweidi said last week he was considering dropping the
peg and tracking a currency basket.
“The forward prices show that flows into the dirham are very
high,” said Simon Williams, HSBC’s senior regional economist.
“Certificate of deposit rates have been cut to discourage
further inflows,” he said.
(Reporting by Dayan Candappa; Editing by James Cordahi)
((dayan.candappa@reuters.com, +971 4 391 8301; Reuters
Messaging: dayan.candappa.reuters.com@reuters.net))
Keywords: GULF CURRENCIES/
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Thursday, 22 November 2007 10:41:21
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