Qatar’s Lower Bank Rates Seen As ‘Additional Boost’ to Consumers and Corporates

Lower bank rates in Qatar will be an additional boost to consumers and corporates, Emirates NBD Research has said in a report.

Recently, the Qatar Central Bank (QCB) decided to reduce the current interest rates for deposits, lending and repo by 0.25% or 25 basis points (bps). The new rates took effect on September 18.

The QCB’s deposit rate (QCBDR) is now 4.35%, lending rate (QCBLR) 4.85% and repo rate (QCBRR) 4.60%.

The QCB said the rate cut followed its “assessment of the current monetary policy of Qatar.

On the impact (of the US Federal Reserve rate cut) on GCC economies, Emirates NBD Research said, “The rate cut has been matched by the GCC given that the currency pegs mean that monetary policy tends to move in lockstep with that of the Fed.

Besides Qatar, the UAE, Saudi Arabia, Bahrain, Oman, and Kuwait central banks have all cut their benchmark policy rates by 25bps, Emirates NBD noted.

In a report, the UAE banking group said: “Lower rates will be an additional boost to consumers and corporates in the GCC economies. Credit growth to the private sector has accelerated in 2025 for both the UAE and Saudi Arabia compared with 2024.

“In the UAE, banking claims on the private sector have recorded an average year/year growth of more than 8% this year, compared with 7% for 2024. In Saudi Arabia, credit demand has been even more robust with growth of more than 14% year-to-date up to July compared with around 11% in 2024.”

The report noted: “As rates move lower, that will free up more income for consumption and investment and at the margin create more demand for credit. 

In a recent Central Bank of the UAE survey on credit demand, interest rates were the least critical variable cited as affecting demand for loans from the domestic banking system with corporates instead seeking to match the performance of the non-oil economy.”

Emirates NBD said: “The US Federal Reserve cut rates by 25 bps (0.25%) at the September FOMC, in line with our expectations. This was the first rate change from the FOMC since December 2024 and takes the upper bound of the benchmark Fed funds rate to 4.25%.”

According to the bank, the next FOMC meeting is at the end of October and will very much be a live meeting with the expectation of another 25bps cut nearly 90% priced in by markets following the September meeting. 

Should economic data continue to follow the path seen in the last few months — moderate inflation pressures with worsening labour market conditions — then an October cut looks more likely than not. We still expect a rate cut at the December FOMC at this time.

For 2026, the Fed projected a more hawkish stance than markets are expecting as it keeps an eye on the inflationary risks of tariffs and sticky services inflation.

“We still expect that the Fed will need to cut rates next year, targeting an end of 2026 Fed Funds rate at 3% by end of year,” Emirates NBD noted.