Lower prices of the “Ibor” in anticipation of the decision of the US Federal

 30-07-2019 Abu Dhabi
LONDON (Reuters) – Interest rates on interbank (IAB) dirham fell to their lowest levels in several months in a move described as a prelude to the Fed’s decision to cut interest rates at its meetings starting today.
Data released by the UAE Central Bank showed interest rates fell to about 285 basis points over a one-year period, while falling to 276 points over the six-month period.
The UAE Central Bank is committed to imitating the decisions of the US Federal Reserve in relation to interest rates because the exchange rate of the dirham is pegged to the US dollar.
Interest rates on interbank AED / EIB recorded record highs in 2018 as a result of a series of decisions by the US Federal Reserve to raise the interest rate on the dollar to four times.
The continued rise of the “Ibor” reflected the interest rates adopted by local banks on deposits and loans provided to customers, whether individuals or private and public institutions, which somewhat reduced the turnout of loans.
The mechanism for calculating interest rates on dirham transactions between UAE banks is based on the daily announced prices of the largest banks operating in the UAE, based on the average interest rate charged by banks to lend guaranteed funds to other banks.