Today, Tuesday, the Board of Directors of the Central Bank of Kuwait decided to increase the discount rate by half a percentage point, to 3.50% instead of 3.00%, effective December 7, 2022.
Kuwait Central Bank Governor Basel Ahmed Al-Haroun said in a note that the decision to raise the discount rate is part of the balanced and gradual approach that the Central Bank follows for its monetary policy aimed at monetary consolidation and financial stability for the units of the banking and financial sector, and to preserve the competitiveness of the national currency and its attractiveness as a profitable and reliable vessel for local savings, and promote a climate conducive to sustainable economic growth.
The governor explained that the decisions of the Central Bank of Kuwait in regarding the shift in the discount rate will affect the levels of interest rates on the dinar.
He specifies that the decision also responds to the measures necessary to intervene on the money market as part of the implementation of monetary policy operations through various instruments aimed at regulating liquidity levels in the banking sector, on the basis of a careful reading of the latest economic data and information locally and globally.
Al-Haroun continued: “That includes the rates of performance economic, including growth and inflation levels, indicators of local liquidity, the movement of deposits, interest rates on the Kuwaiti dinar and foreign currencies, and their expected trends in light of the effects and repercussions of any changes or developments that the local economy may suffer.” That the various factors affecting the consumer price index have been taken in consideration to identify and evaluate the factors that constitute aspects of pressure on these prices, taking into account the nature of the Kuwaiti economy, which is open to the outside world.
Al-Haroun concluded his statement by emphasizing the continuation of the approach of follow-up to developments and developments in economic, monetary and banking conditions and the willingness to act as necessary to direct various monetary policy instruments in order to maintain monetary and financial stability.
Read More About: Business News