Four members of the GCC economic bloc have raised the interest rates, mimicking a move by the US Federal Reserve amid pressure on their economies on the back of the sliding oil prices.

Saudi Arabia, the top oil exporter in Opec’s basket, Kuwait and Bahrain announced the increase of a quarter of a percentage point in official rates on Wednesday evening, while the UAE followed the move on Thursday. It was widely expected that the Gulf states would follow the Fed decision. Oman and possibly Qatar are also expected to increase their rates.

Saudi Arabia’s central bank increased the reserve repo rate, the rate at which commercial banks deposit money with the central bank, from 25 basis points to 50 basis points. However the key repo rate remains unchained.

“There is a theoretically beneficial effect,” said Redmond Ramsdale, director at the UK’s Fitch Ratings. “For Saudi banks, the main funding source, deposits, are mainly non-interest bearing. So the cost of funding will remain stable and their margins will go up mildly as they raise interest rates.”

Kuwait raised the discount rate by 0.25 per cent to 2.25 per cent, effective Thursday. Bahrain also raised its overnight interest rate by 25 basis points to 0.5 per cent and its rate for one week by a similar value to 0.75 per cent. It kept the repo rate unchanged at 2.25 per cent. The UAE central bank raised the rate on its certificates of deposits – the monetary policy instrument used by the regulator through which changes in interest rates are transmitted  – by 25 basis points. The rate change in the UAE is effective immediately.

The US central bank earlier lifted the range of its benchmark interest for the first time in almost a decade to 0.25-0.50 per cent, up from 0-0.25 per cent. The central bank’s chairperson Janet Yellen said this would be followed by gradual tightening as officials watch for evidence of higher inflation.

“The 25 basis points rise was really token, and everyone has been expecting it so it is already priced in,” said Ramsdale. “The bigger question is what the cycle will look like; for example a 100 basis points rise next year would be more meaningful.”

Borrowers will see the cost of lending go up further. “Liquidity has been falling due to lower oil prices and lower government deposits for some time now, and interbank lending rates have been rising,” said Khatija Haque, head of research at Dubai’s Emirates NBD.

“This raising of interest rates was not surprising and we won’t see any change to this trend.”

Five of the six Gulf oil exporting states peg their currencies to the US dollar, while the sixth, Kuwait, ties its dinar to a basket dominated by the dollar.

The plunge of oil prices since June last year has started to put pressure on those pegs as the governments, which rely heavily on the sale of crude for revenues, are now facing budget deficit. As economies slow, money market conditions are tightening as flows of fresh oil revenues into commercial banks decrease and governments issue bonds to fund budget deficits, threatening to squeeze lending to corporations and consumers.

Qatar’s central bank has indicated it may delay any rate rise; in October, central bank governor Sheikh Abdullah bin Saud al-Thani insisted that he saw no need to follow any US move.

However, in the last few weeks the Qatari riyal has dropped in the forwards market to its lowest level against the dollar since 2009, so the central bank may not be able to keep official rates low indefinitely.