Interest Rates

Interest Rates represent the cost of borrowing money or the return on investment for savings, typically expressed as an annual percentage of the principal amount. Rates are influenced by central bank policies, inflation, market demand for credit, and overall economic conditions.

Businesses monitor interest rates closely, as fluctuations affect loan repayments, capital investment decisions, and financial forecasting. In the UAE, the Central Bank’s decisions on the Base Rate directly impact consumer borrowing costs, business financing, and interbank lending.

Fixed rates remain constant over the loan tenure, while variable rates fluctuate based on market conditions.