Gulf stock markets drop into red with new Fed rate hike
The United States Fed raised interest rates by a quarter of a percentage point on Wednesday, which led to Gulf central banks following suit.
Most major Gulf stock markets declined during early trading on Thursday, following yet another rate hike by the US Federal Reserve on Wednesday.
The majority of Gulf Cooperation Council (GCC) countries including Saudi Arabia, the United Arab Emirates and Qatar have their currencies pegged to the dollar and are vulnerable to the impacts of US monetary tightening.
What happened: The Fed raised interest rates by a quarter of a percentage point on Wednesday, leading Gulf central banks to follow suit. Central banks from Saudi Arabia, the UAE and Bahrain raised their interest rates by 0.25% shortly afterward.
The Qatar Central Bank, which said it will hold its interest rate steady on Wednesday, saw its benchmark increase by 1% while most others in neighboring Gulf countries dropped. Nevertheless, it also raised its rates by 0.25% later the same day.
