United Arab Emirates interbank rates fell on Thursday, the first day they were set after the central bank took control of the fixing process in the hope it would lower the rates it has long said are too high.

In September, the central bank rejigged the panel of providers for the Emirates Interbank Offered Rate (EIBOR) and altered the formula used to calculate it, part of a raft of measures the bank has taken in recent weeks that it says are aimed at boosting lending in the UAE.

The three-month Emirates Interbank Offered Rate declined to 1.97857 percent from 2.05 percent on Wednesday, while the one-month rate declined to 1.62143 percent, from 1.7 percent on the previous day.
   
The six-month rate stood at 2.24286 percent, down from 2.29375 percent.   

Under the new formula, the fixing in each tenor is the average of the submitted rates after excluding the two highest and the two lowest rates, according to the central bank.

This is a change from the previous system where the average was taken after excluding just the highest and the lowest rate.

Early in September, the central bank changed the panel of providers for EIBOR in the hope it would lower the interbank rates, which it said do not reflect the market.
 

The new 11-bank panel includes four new local banks and dropped two foreign lenders.

The bank providing the lowest rates on Thursday was new addition RAKBank, while the highest contributions came from Emirates NBD. - Reuters