ABU DHABI — A recent move by the United Arab Emirates (UAE) to cut interest rates will protect the currency and support the economy amid rising external risks, the country's top central banker told CNBC on Sunday.

"When we have a turning cycle, lower rates really help our economy," Central Bank Governor Mubarak Rashed Khamis Al Mansoori said in an panel discussion at the Middle East Banking Forum event in Abu Dhabi.

The governor also addressed key uncertainties such as rising global risks, diverging global rates and the impact of both on the domestic growth outlook in the United Arab Emirates.

"I think the UAE is on a very good path for recovery," he said. "I'm confident that we're on the right recovery path, and I hope the geopolitics settle so the whole region can flourish," he added.

His comments come just days after the central bank, which pegs its currency to the U.S. dollar, cut its benchmark interest rate by a further 25 basis point to 2%, after the U.S. Federal Reserve cut interest rates for the third time this year by the same margin. Most GCC (Gulf Cooperation Council) central banks follow the Fed's monetary policy lead in order to maintain exchange rate stability.

"I think this is positive for the economy of the UAE, given that we have been coming through a low oil price period since 2014," Al Mansoori said, referring to the reduced interest rate.

The latest projection from the central bank indicates that the UAE economy is still performing, with overall growth projected at 2.4% in 2019, comprising 1.4% growth in the non-energy sector and 5% growth in the energy sector. The IMF separately forecasts 2.5% growth for 2020.