The Federal Reserve raised interest rates by a quarter of a percentage point on Wednesday, reaching their highest levels in 16 years, attributing this decision to the continued rise in inflation. The central bank set the overnight interest rate at a range of 5.25% to 5.5%. The accompanying statement left the door open for another increase. The bank stated: "The Federal Open Market Committee will continue to assess additional information and its impact on monetary policy, using language that has not changed significantly since the June statement, keeping options open for the bank."
**Dollar Impact**
As a result, the dollar fell 0.168% to 101.130 against a basket of currencies on Wednesday, while the euro rose 0.19% to $1.1074.
**UAE Central Bank**
The Central Bank of the United Arab Emirates announced that it "will raise the base rate on overnight deposit facilities by 25 basis points to 5.40% from 5.15% effective tomorrow, Thursday."
**Kuwait Central Bank**
In a statement, the Central Bank of Kuwait announced that it "decided to raise the discount rate by a quarter of a percentage point to 4.25% from 4%, following the U.S. Federal Reserve's decision to raise the key interest rates by a quarter of a percentage point." The Kuwaiti dinar is linked to a basket of currencies, including the U.S. dollar.
**Bahrain Central Bank**
The Central Bank of Bahrain also decided, in a statement, to raise the key interest rate on one-week deposits by 25 basis points to 6.25% from six percent. It added that it "decided to raise the overnight deposit rate by 25 basis points to six percent from 5.75%, while keeping the interest rate on four-week deposits unchanged at 6.75%."
**Qatar Central Bank**
The Qatar Central Bank raised the main interest rates by 25 basis points, clarifying that it "raised the lending rate to 6.25%, while the deposit rate increased to 5.75%, and the repurchase rate to six percent."
**Saudi Central Bank**
Similarly, the Saudi Central Bank announced in a statement that it "raised the main interest rates by 25 basis points," indicating that it "raised the repurchase agreement (repo) rate to six percent and the reverse repurchase agreement (reverse repo) rate to 5.5%."
**U.S. Stock Market**
U.S. stocks closed with little change; according to preliminary data, the S&P 500 index closed up 0.09 points at 4567.55, while the Nasdaq Composite fell 15.94 points, or 0.12%, to 14128.62. The Dow Jones index increased by 89.63 points, or 0.25%, to 35527.70.
