The moves demonstrate continued commitment to the currency pegs to the US dollar, and are expected to stoke record inflation levels even further.

The UAE, Qatar and Bahrain have all announced a rate cut, following the US down to 2 per cent. Saudi Arabia is expected to cut its domestic rates on Saturday.

However, Qatar and Bahrain have held their benchmark lending rates at higher levels to keep it more expensive to borrow. The hope is that this will contain private sector lending and reduce inflationary pressures.