In 2024, UAE consumers are anticipated to experience a reduction in borrowing costs as interest rates are expected to decrease by 100 basis points.
Analysts suggest that interest rates on personal loans, mortgages, car financing, and credit cards will decline due to expected rate cuts by the US Federal Reserve and the Central Bank of the UAE (CBUAE), influenced by a drop in inflation in the United States.
The UAE, pegging its currency to the US dollar, typically mirrors the Fed’s monetary policy. The potential 50-100 basis points rate cut is seen as a response to easing inflation pressures. Lower interest rates are expected to impact consumers positively, reducing borrowing costs for personal loans, mortgages, and credit cards.
The decline in rates may particularly benefit short-term loans like credit cards and auto loans. Additionally, lower mortgage rates are expected to enhance housing demand and affordability.
