The Central Bank of Bahrain (CBB) has announced its decision to raise its Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points from 4.25% to 4.50%, effective September 17, 2026.

This comes following the US Federal Reserve’s announcement today to raise the Interest Rate on Reserve Balances (IORB) by 25 basis points.

The decision comes as part of the measures taken by Central Bank of Bahrain in maintaining monetary and financial stability in the Kingdom of Bahrain in light of global financial market developments, said CBB in a statement.

Similar action was taken by central ‌banks of other GCC countries with Saudi Arabia, the region's biggest economy and world's largest oil ​producer, raising its repurchase agreement (repo) rate by 25 basis points to 4.50% and its reverse repo ​rate also by 25 bps to 4%. 

The Central Bank of the UAE too decided to raise the Base Rate applicable to the Overnight Deposit Facility (ODF) by 25 basis points, from 3.65% to 3.9%, effective September 17.

US ⁠President Donald Trump had promised to lower prices on his watch, however the combined impact of his global import tariffs, an energy shock following the Iran war, and capital spending from the AI boom has kept up price pressures. The Fed responded by raising its benchmark rate by ​a quarter of a ​percentage point to ⁠3.75%-4.00%, reported Reuters.

The Gulf's oil and gas exporters generally follow ​the Fed's lead on rate moves as most regional currencies are pegged to ​the US dollar. Only the Kuwaiti dinar is pegged to a basket ⁠of currencies, which includes the dollar.

The Central Bank of Oman too announced that it was raising the repo rate by 25 basis points to 4.5% followed by Qatar's central bank which too hiked key interest rates by 25 basis points.

The Central Bank of Kuwait left rates unchanged and ​said in a separate statement that current data reflected "the soundness and ​strength of the ⁠monetary and financial stability" in the country.