The Central Bank of the UAE has lowered its base rate for the Overnight Deposit Facility (ODF) by 0.25 percentage points. This move follows a similar rate cut by the US Federal Reserve and takes effect immediately. The UAE Central Bank said it is aligning its policy with global rate changes. This cut is important as it marks the third and final policy easing step for 2025. The UAE’s monetary policy follows the US because the Dirham is pegged to the US Dollar. When the US Fed cuts rates, the UAE Central Bank follows to keep the currency stable and avoid capital outflow. This latest step supports the nation’s growth outlook. The UAE economy is expected to grow 4.9% in 2025 and 5.3% in 2026. For ordinary people, this rate cut means cheaper borrowing. When the base rate goes down, banks pay less to borrow money and can offer lower loan interest to customers. New homebuyers benefit as lower rates improve their chances to qualify for bigger mortgages. Existing homeowners with variable-rate loans can see monthly payments drop and might consider refinancing to save money over time. Experts expect that easier financing will boost demand for homes like villas and townhouses. This could lead to higher property prices driven by stronger buyer confidence. Borrowers win quickly with lower loan costs. Savers may see mixed results; fixed deposits keep old rates until they mature, while new deposits might earn less interest. Credit card and overdraft rates may reduce but usually more slowly. For renters, the rate cut has an indirect effect. Lower mortgage costs may reduce pressure on rent increases over time, but rents also depend on supply and demand. The rate cut aligns UAE’s monetary policy with the US Fed to maintain the dirham peg and keep borrowing costs aligned globally. Policymakers say it will support growth as inflation shows signs of easing.