- What is the UAE interest rate now?
- Why does the UAE interest rate follow the Fed?
- A short UAE interest rate history
- What does a rate rise mean for your mortgage?
- Do savers and fixed deposits gain?
- What could change the UAE interest rate next?
- Verdict: the UAE interest rate is a Fed decision, priced locally
- Frequently Asked Questions
- Sources
Data note: FOUAE (Founders of UAE) based these UAE interest rate figures on Central Bank of the UAE releases and reporting up to 28 October 2026. It is general information, not financial advice.
The UAE interest rate stands at 3.9 per cent after the Central Bank of the UAE held it on 28 October 2026, the bank’s release shows. It rose from 3.65 per cent in September, matching a US Federal Reserve hike. Because the UAE pegs the dirham to the dollar, its rate tracks the Fed.
In short
- The Central Bank of the UAE kept its Base Rate at 3.9 per cent on 28 October 2026.
- Analysts quoted by Khaleej Times said September’s rise would be the first since July 2023.
- Variable mortgages feel it at the next reset, while savers may gain sooner.
What is the UAE interest rate now?
The headline figure is the Base Rate, which the Central Bank of the UAE applies to its Overnight Deposit Facility. On 28 October 2026, the bank kept it at 3.9 per cent. The release also kept the rate on its standing credit facilities at 50 basis points above the Base Rate.
On FOUAE’s arithmetic, that puts the rate on its standing credit facilities at 4.4 per cent. However, households rarely borrow at either figure. Instead, banks price most loans off the Emirates Interbank Offered Rate, or EIBOR, plus their own margin.
The bank’s release says the Base Rate sets an effective floor for overnight money market rates. On FOUAE’s reading, loan prices then follow those market rates.
Why does the UAE interest rate follow the Fed?
The answer is the currency peg. The UAE pegs the dirham to the US dollar, so it cannot set rates far from the Fed without straining that link.
In practice, the Central Bank anchors its Base Rate to the Fed’s Interest Rate on Reserve Balances. So the bank “typically moves its Base Rate in step with the Fed”, Century Financial’s chief investment officer, Vijay Valecha, told Khaleej Times in September.
That explains the timing. On 16 September 2026, the Fed raised its target range by 25 basis points to 3.75 to 4 per cent, Gulf News reported. The UAE matched it the same day, effective 17 September, Trading Economics reported.
This trade-off is clear. The peg gives businesses a stable exchange rate for trade and pricing. In return, the UAE imports US monetary policy, even when its own economy points elsewhere.
A short UAE interest rate history
The recent path has turned. The Central Bank cut in late 2025, held through most of 2026, and then raised again in September.
| Decision | Base Rate | Source |
|---|---|---|
| 10 December 2025 | Cut from 3.9% to 3.65% | The National, December 2025 |
| 28 January 2026 | Held at 3.65% | Gulf News, January 2026 |
| 16 September 2026 | Raised from 3.65% to 3.9% | Gulf News, September 2026 |
| 28 October 2026 | Held at 3.9% | Central Bank of the UAE, October 2026 |
In other words, the September hike reversed the December 2025 cut. The rate now sits where it stood a year ago.
Gulf News noted that the Fed held in October despite persistently high US inflation and a spike in energy prices. Those are US conditions. Even so, the peg means US decisions set the UAE rate.
What does a rate rise mean for your mortgage?
It depends on the loan type. Fixed-rate borrowers generally keep their agreed rate during the fixed period, Gulf News explained on 16 September 2026. Meanwhile, variable-rate borrowers may pay more once their benchmark is next reviewed.
Timing matters most here. For EIBOR-linked loans, “the effect will come at the next reset date”, Madhur Kakkar, founder and chief executive of Elevate Financial Services, told Khaleej Times. He also told Khaleej Times that three-month EIBOR was trading near 3.94 per cent in mid-September 2026.
New loans are different again. Banks set their own prices for new mortgages, car loans and personal loans, so increases will vary, Gulf News reported. For the wider credit picture, see FOUAE’s analysis of UAE bank lending.
The FOUAE calculation: borrowers versus savers
Take an AED 1.5 million mortgage with 25 years left. FOUAE assumes a rate of 4.5 per cent rising to 4.75 per cent, an illustrative figure rather than a quoted bank rate. On FOUAE’s arithmetic, the monthly payment rises from about AED 8,337 to about AED 8,552.
That is about AED 214 more a month, or roughly AED 2,571 a year. Kakkar gave a similar estimate of about AED 210 a month for the same loan size and term, without stating a starting rate.
Now compare a saver. On FOUAE’s arithmetic, the same 25 basis points on AED 100,000 in deposits adds AED 250 a year, if the bank passes on the full rise. So, by the same arithmetic, a saver needs about AED 1 million on deposit to match the borrower’s higher payments over a year. Both sides use the same 25 basis point rise.
Do savers and fixed deposits gain?
Yes, though not automatically. Returns on savings and fixed deposits may improve, but each bank sets its own pricing by term and balance, Gulf News reported in September 2026.
Savers may also see the change first, according to Kakkar. He told Khaleej Times that “depositors are likely to see improved savings and term deposit returns sooner than borrowers”. On FOUAE’s reading, that gap reflects how deposits reprice quickly, while many loans wait for a reset date.
For banks, the balance between loan and deposit rates drives profit. FOUAE examined that link in its piece on UAE bank margins.
What could change the UAE interest rate next?
The Fed sets the timetable. Its next scheduled decision falls on 8 and 9 December 2026, according to the Federal Reserve’s published calendar. In September and October, the Central Bank announced its UAE interest rate decision on the same day as the Fed. Trading Economics and the bank’s release show this.
Signals point both ways. When the Fed hiked in September, a majority of its policymakers projected another rise this year, Trading Economics reported on 16 September 2026. By October, however, the Fed chose to hold.
For property buyers, the rate is one input among several. FOUAE’s guide to buying Dubai property in 2026 covers the others.
Verdict: the UAE interest rate is a Fed decision, priced locally
The UAE interest rate rose because the Fed rose, not because of a change in UAE conditions. The peg makes that link close to automatic. Even so, the local effect depends on your contract: fixed loans wait, variable loans reset, and savers may gain first. A fresh test arrives on 9 December 2026.
Frequently Asked Questions
What is the UAE interest rate in November 2026?
The Central Bank of the UAE Base Rate is 3.9 per cent, according to the bank’s 28 October 2026 release. The bank had raised it from 3.65 per cent in September, Gulf News reported.
Will my fixed-rate mortgage go up?
Not during the fixed period, in general. Fixed-rate borrowers keep their agreed rate until that period ends, Gulf News explained. After it ends, the loan may move to a different rate under its contract.
When is the next UAE rate decision?
The Fed’s next scheduled decision is on 8 and 9 December 2026. The Central Bank of the UAE usually announces its own decision soon after the Fed.
Sources
The Central Bank of the UAE announced the 28 October 2026 hold in its own release. Gulf News covered the September hike and its effect on loans and savings. It also reported the October hold.
Khaleej Times published comments from Vijay Valecha and Madhur Kakkar on 15 September 2026. The National reported the December 2025 cut. Trading Economics noted the Fed’s projections, and the Federal Reserve publishes its meeting calendar.
Founders of UAE (FOUAE) is an independent, digital-first business publication covering the founders, companies and economy of the United Arab Emirates. Follow FOUAE on Instagram and LinkedIn.
