Gulf petrostates turn page on stimulus by following Fed hike

Scott Livermore, chief economist for the Middle East at Oxford Economics: “If the Fed moves faster than some countries feel comfortable with, fiscal policy can be used to support growth.”

DUBAI: Gulf Arab central banks followed the United States Federal Reserve (Fed) and raised interest rates by a quarter percentage point for the first time since 2018, though higher oil revenues mean governments can spend more to cushion the impact of increasing borrowing costs.

Policymakers in countries including Saudi Arabia and the United Arab Emirates (UAE) tend to match the Fed’s decisions to protect their currencies’ pegs to the US dollar.