FX.co ★ UAE Central Bank Eases Monetary Policy, Lowers Interest Rates to 3.90%

In a significant monetary policy shift, the Central Bank of the United Arab Emirates announced a reduction in its benchmark interest rate from 4.15% to 3.90%, as of October 29, 2025. This marks a pivotal moment as the UAE adopts a more accommodative stance to spur economic growth and investment.

The decision to lower rates reflects the Central Bank’s objective to address sluggish economic activity and potentially counterbalance external headwinds impacting the nation's economic landscape. By reducing the cost of borrowing, the bank aims to boost domestic lending and consumption, ensuring increased fiscal stimulus within the region.

Market analysts view the interest rate cut as an indicator of proactive economic management, positioning the UAE to adapt swiftly to global economic trends while bolstering internal economic health. As businesses and consumers adjust to this development, there will be particular interest in how this policy affects sectors such as real estate, retail, and manufacturing that are sensitive to borrowing costs.