The majority of central banks in the Gulf region raised the main interest rates on Thursday, following a decision by the US Federal Reserve to raise its key policy rate by 0.25%, in an effort to counter inflation. Qatar kept the interest rate unchanged, while the Saudi Central Bank (SAMA), the Central Bank of the UAE, the Central Bank of Oman and the Central Bank of Bahrain announced in separate statements they would raise their rates by 0.25%. The Saudi Central Bank (SAMA) said it increased its key interest rates by 25 basis points, following the US Federal Reserve’s move. It added that it lifted its repurchase agreement (repo) and reverse repo rates by 25 bps to 5.25% and 4.75%, respectively. Similarly, the UAE Central Bank raised its base rate for the overnight deposit facility (ODF) by a quarter of a percentage point to 4.65 percent, from 4.4 percent, effective from Thursday. For its part, the Central Bank of Bahrain increased its key rate on one-week deposits by 25 bps to 5.5 percent, citing “development of the international financial market and… to ensure the smooth functioning of the money markets in the kingdom”. On the other hand, the Qatar Central Bank (QCB) decided to keep the current interest rates unchanged, saying that it would maintain the repo rate at 5.25 per cent, the deposit rate at 5 percent and the lending rate at 5.5 percent. “The Qatar Central Bank aims to keep current interest rates at appropriate levels to support economic growth,” the QCB said in a statement. “The step-down in the magnitude of the rate hike is positive for the GCC, who have not required such an aggressive tightening cycle,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank. “We expect to see some greater impact of the rate hikes this year on credit demand, though the investment programs should provide some support for credit growth,” she added.