UAE residents wishing for lower interest rates on loans might have to wait a while longer, with the highly expected interest rate reduction by the US Federal Reserve probably being delayed until late 2025. As the UAE dirham is tied to the US dollar, the borrowing and savings rates of the country follow very closely the rates in the US.
While most had anticipated a possible rate cut in May, analysts now warn that ongoing inflation and conservative Fed policy ensure any reduction is not on the horizon in the near future. This delay impacts a broad range of UAE residents—from would-be homeowners and car buyers to small business owners who depend on credit.
Financial experts counsel consumers to defer non-essential borrowing if feasible, particularly on high-value products such as property and vehicles. On the deposit side, higher interest rates will continue to work in favor of depositors via greater returns on fixed deposits and savings accounts for now.
With rate cuts further out, residents are motivated to revisit plans, seek advisers, and ponder money-saving options. From refinancing a mortgage or taking out a new loan, waiting patiently could pay dividends down the line with better terms as economic forces settle.
