[size=36][ltr]The US Federal Reserve raises interest rates and shakes the world economy[/ltr][/size][ltr]10:31 - 26/09/2018[/ltr]
[ltr]Follow up of Mawazine News
The Federal Reserve raised interest rates Wednesday as expected and predicted economic growth for at least another three years.
In a statement on monetary policy, the council said it had raised the benchmark overnight lending rate by one quarter of a percentage point to a range of two to 2.25 percent.
The Board continues to expect interest rates to rise again in December and three more next year, as well as one increase in 2020.
The benchmark overnight lending rate stands at 3.4 percent, nearly half a percentage point above the board's "neutral" interest rate expectations, where interest rates do not stimulate or restrict the economy.
The dollar fell against the euro after the release of the Federal Reserve's statement while the yield curve on US bonds stabilized and shares rose.
The board expects the economy to grow faster than expected at 3.1 percent this year and to continue its growth at an average pace of at least three years with steady unemployment and inflation stabilizing near the 2 percent target.
This interest rate increase is the third in the current year and the seventh in the last eight quarters.
The Saudi Arabian Monetary Agency (SAMA) said in a statement on Wednesday it had decided to raise the rate of reverse repurchase agreements by 25 basis points to 225 basis points (2.25 percent) from 200 basis points.
The statement added that the institution decided to raise the rate of repurchase agreements to 275 basis points (2.75%) from 250 basis points on the effect that the decision has immediate effect.
The UAE central bank also announced on Wednesday that it would raise the "repo rate" which applies to short-term borrowing from the central bank by guaranteeing 25 basis points of deposits.
He added that he raised the "interest rates applied to certificates of deposit issued by him, in line with the rise in interest rates on the US dollar."
This came after the Federal Reserve raised interest rates by 25 basis points.[/ltr]