Gulf central banks chop interest rates in tandem after Fed cut

The U.S. Federal Reserve’s decision to cut interest rates set off a chain reaction of parallel reductions in the Middle East.

Central banks in Saudi Arabia, the UAE, Bahrain and Oman, which have currencies pegged to the U.S. dollar, chopped their own borrowing rates today by 0.25% in tandem with the Fed, Reuters reports. Qatar cut its three main interest rates by 0.30%.

The Fed’s action on Wednesday produced a sour reaction, however, on Gulf stock exchanges, which dropped in morning trading with other global markets as traders absorbed the message from Federal Reserve Chairman Jerome Power that rates cuts will be slower in 2025.

Benchmark indexes lost ground in Riyadh, Dubai and Abu Dhabi. Qatar’s market was closed for the country’s National Day.