Good news for UAE residents and businesses. The UAE Central Bank has just lowered its Base Rate by 25 basis points, from 4.15% to 3.90%, effective this Thursday. This move follows the US Federal Reserve’s recent decision to cut its interest rates, keeping things in sync because of the UAE’s currency peg to the US dollar.

What does this mean for you? Expect borrowing to get a bit cheaper. Whether you’re eyeing a new mortgage, a personal loan, or business credit, the rates should ease up. In simple terms, monthly payments could get friendlier, especially for those with variable-rate loans.

This comes after the US Fed trimmed its federal funds rate to a range of 3.75% to 4%, hoping to support the job market and tackle stubborn inflation. The ripple effects are clear, softening employment numbers, and ongoing economic headwinds are pushing for these cuts.

Which sectors will benefit

For the UAE, lower interest rates could give a boost to sectors like real estate, tourism, and small businesses by making funding easier. But keep in mind, analysts say the impact might be modest unless the Fed decides to cut rates more aggressively in the future.

Why is the Fed making these rate cuts? Their goal is a tricky balance: tame inflation while keeping employment strong. With big companies cutting jobs and inflation still slightly above target, the Fed is playing it safe, using these rate cuts as insurance against a potential economic slowdown.

Future interest rates

Looking ahead, another cut might come in December, possibly bringing rates closer to 3% in 2026, but things could shift depending on economic data and new Fed leadership.

Stay tuned for more updates and how these changes could affect your wallet!

The UAE Cabinet, chaired by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, has approved the federal budget for 2026, estimated at Dhs92.4 billion, the largest in the nation’s history.

The budget is projected to generate revenues of Dh92.4 billion with balanced expenditure, reflecting the UAE’s continued fiscal stability and strategic investment in growth.

Sheikh Mohammed said, “This is the highest federal budget since the Union was established. It is a budget that strengthens the federal system and demonstrates our ongoing dedication to balanced development.”

The Cabinet also approved an annual programme to support and enhance the federal financial centre, funded by allocations from the federal budget, aimed at ensuring the financial sustainability of federal institutions.

Economic Growth and Foreign Investment

Sheikh Mohammed highlighted strong national economic indicators, announcing that the UAE’s outward foreign investment balance has reached Dh1.5 trillion, a 9 per cent increase compared to last year. “We are the leading Arab economy and one of the top 20 international economies exporting FDI,” he said on the X platform.

The Cabinet further approved 35 international agreements and memorandums of understanding covering areas of economic and strategic cooperation.

Sheikh Mohammed noted the success of the UAE’s export development policy, with exports growing from Dh470 billion in 2019 to Dh950 billion in 2024, an increase of 103 per cent.

“Our budgets are balanced, our investments are growing, our foreign trade is expanding, and our economy is thriving under the leadership of my brother, His Highness Sheikh Mohamed Bin Zayed Al Nahyan. Our country continues to move from summit to summit with prosperity and stability for its people and residents,” Sheikh Mohammed said.

The UAE Ministry of Finance has unveiled ‘Retail Sukuk’, a groundbreaking new initiative that allows individuals, both citizens and residents, to invest directly in Shariah-compliant, government-backed Treasury Sukuk (T-Sukuk).

For the first time, everyday investors can now access these secure, sovereign-backed instruments through fractionalised digital investment platforms operated by participating UAE banks, with the minimum investment starting at just Dh4,000.

Empowering the community through smart, inclusive finance

Sheikh Maktoum bin Mohammed bin Rashid Al Maktoum, First Deputy Ruler of Dubai, Deputy Prime Minister, and Minister of Finance, said the ‘Retail Sukuk’ marks a new chapter in the nation’s financial journey.

“This initiative opens new horizons for citizens and residents to contribute to shaping the future through secure, government-backed investment instruments,” he said.

It transforms investment in government bonds into an accessible digital experience, empowering everyone to participate in long-term savings and national growth.”

What is T-Sukuk

The Ministry confirmed that the T-Sukuk are fully Shariah-compliant, previously available only to institutional investors. Now open to all UAE residents, they provide a secure and stable savings tool backed by the government, promoting financial literacy and responsible saving habits.

Linked to dirham-denominated, market-traded T-Sukuk, the Retail Sukuk give individuals access to the same sovereign-grade assets held by large investors, all via user-friendly digital platforms.

The Ministry will announce the first participating bank on November 3, with more details on registration and investment channels to follow.

A new era of financial empowerment

By bridging technology, inclusion, and Islamic finance, the Retail Sukuk initiative represents a major milestone in democratising investment opportunities, enabling every resident to participate in the UAE’s economic growth story safely and transparently.