Article Published By NOUQUD editorial
The UAE held its base rate at 3.65%. The decision was made in Washington.
Nothing changed on 29 July, and nothing has changed since December 2025. For anyone holding a mortgage or savings in dirhams, the useful question is not what the central bank decided. It is why it was never really the UAE's decision.
What happened
The TermCentral bankالبنك المركزيThe government's bank, which controls the money supply, sets interest rates, and oversees all other banks in the country.Open the term of the UAE held its base rate at 3.65% on 29 July. That is the rate paid on the overnight deposit facility, and the central bank describes it as the effective floor for overnight money market rates in the country.
Nothing about a TermMortgageالرهن العقاريA loan secured by property, where the lender holds a claim on the house until the debt is repaid.Open the term payment changes because of it. Nothing about a fixed deposit changes either.
The part worth noticing is not the decision. It is how long the same decision has now been taken. The base rate last moved on 11 December 2025, when it came down from 3.90%. It has been 3.65% ever since.
The UAE base rate, at the end of each quarter
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| Category | UAE base rate |
|---|---|
| 2022 Q1 | 0.40 |
| 2022 Q2 | 1.65 |
| 2022 Q3 | 3.15 |
| 2022 Q4 | 4.40 |
| 2023 Q1 | 4.90 |
| 2023 Q2 | 5.15 |
| 2023 Q3 | 5.40 |
| 2023 Q4 | 5.40 |
| 2024 Q1 | 5.40 |
| 2024 Q2 | 5.40 |
| 2024 Q3 | 4.90 |
| 2024 Q4 | 4.40 |
| 2025 Q1 | 4.40 |
| 2025 Q2 | 4.40 |
| 2025 Q3 | 4.15 |
| 2025 Q4 | 3.65 |
| 2026 Q1 | 3.65 |
| 2026 Q2 | 3.65 |
Why you should care
The dirham is TermCurrency pegربط العملةA fixed exchange rate between a local currency and another, usually the dollar, so the rate does not move with market supply and demand.Open the term to the US dollar. A peg is a promise that one dirham is worth the same number of dollars by design, and TermInterest rateسعر الفائدةThe percentage of principal charged by a lender or paid by a saver, usually stated as an annual rate.Open the term are part of what keeps that promise credible. If dirham rates drifted far from dollar rates, money would move to whichever side paid more, and the promise would come under pressure.
So the central bank anchors its base rate to the Federal Reserve’s rate on reserve balances, and it says so in writing every time it announces one. The wording does not vary: the decision was taken following the Federal Reserve’s announcement that same day.
Two things follow for anyone holding dirhams.
The news that moves your rate is American news. Local growth figures and local property prices will not tell you where your mortgage payment is going. The Federal Reserve will, and the UAE announcement lands the same day as the American one rather than weeks behind it.
This rate spends most of its time standing still. It has been at 3.65% for close to eight months. Before that it sat at 4.40% for nine months, and before that at 5.40% for 14. The chart above is four years of a number that moves in short bursts and then stops for a long time, which is what a pegged rate looks like when the currency it follows is not moving either. A hold is not a pause before something. It is the normal state of this rate.
What you should know
A variable mortgage here is not priced off the base rate directly. It is priced off EIBOR (Emirates Interbank Offered Rate), the rate at which banks lend dirhams to each other, which the central bank publishes daily. EIBOR follows the base rate without matching it, and most variable mortgages reprice against the three-month rate once a quarter. A TermCar insuranceتأمين السياراتA contract that covers the cost of damage to your vehicle or injury to others, depending on the type of policy you hold.Open the term change reaches a payment on the next reset date rather than on the day it is announced.
The margin is the only part of the number anyone can negotiate. A variable mortgage is quoted as a benchmark plus a margin. Nobody in the country moves the benchmark. The margin is set by the lender and then fixed for the life of the loan, which makes signing, or refinancing, the only moment it is decided.
A hold in policy is not a hold in what your bank pays you. The base rate is a floor for overnight lending between banks. What a deposit account pays is a commercial decision each bank makes on its own schedule, and it can move in a quarter when the policy rate does not.
The next change will be announced in Washington before it is announced in Abu Dhabi. Until it is, 3.65% is not this month’s number. It is the number.
Sources
- Central Bank of the UAE — CBUAE Maintains the Base Rate at 3.65%read
- Federal Reserve Bank of St. Louis — Interest Rate on Reserve Balances (IORB), daily seriesread
An article records a moment. It is not silently updated; anything that changes gets a dated correction here.