The Central Bank of the UAE has lowered interest rates in line with the decrease in interest rates on the US dollar, following the U.S. Federal Reserve’s move to cut its rate by 50 basis points.

The Central Bank’s Repo Rate applicable to borrowing short-term liquidity against Certificates of Deposits has also been decreased by 50 basis points. Certificates of Deposit, which CBUAE issues to banks operating in the country, are the monetary policy instrument through which changes in interest rates are transmitted to the UAE banking system.

The U.S Federal Reserve Chairman on Tuesday said that the spread of the virus had caused a material change in the U.S. central bank’s outlook for growth, though the US economy remains strong. “The virus and the measures that are being taken to contain it will surely weigh on economic activity, both here and abroad, for some time,” Powell said in a news conference shortly after policymakers unanimously decided to cut rates by a half percentage point to a target range of 1.00% to 1.25%.

Elsewhere, the US Federal Reserve’s emergency decision to cut interest rates on Tuesday has not managed to bring any joy to the financial markets with Asian shares struggling and bonds held gains. The US dollar fell across the board in an eight-week low, pushing the euro to an eight-week peak. Yen hit its highest since October at 106.84 per dollar, before paring gains to trade flat. The Australian dollar advanced to $0.6603. Oil prices steadied, with Brent settling at US$51.86 per barrel and U.S. crude 0.4 per cent firmer at US$47.37 a barrel . Gold rose 0.4 per cent to $1645.25 an ounce.