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CBK raises discount rate by half percentage point

KUWAIT: The Board of Directors of the Central Bank of Kuwait (CBK) decided to raise the discount rate by 0.50 percent from 3.00 percent to 3.50 percent effective from Wednesday. “The decision came in line with the CBK’s balanced and progressive approach that aims to reinforce an environment inducing to economic growth, and maintain the financial and monetary stability and attractiveness of the national currency as a store of the local savings,” a CBK press release quoted Governor of the Bank Basel Al-Haroon as saying.

Al-Haroon explained that the decisions of CBK regarding moving the discount rate to affect the levels of interest rates on the Kuwaiti Dinar, are all based on thorough reviews of the recent local and international data including the economic performance ratios, e.g. growth and inflation levels, domestic liquidity indicators, deposit movements, and Kuwaiti Dinar and foreign currency interest rates. The CBK interventions in the monetary market are in keeping with its monetary policy by using various instruments to regulate the levels of liquidity in the banking sector.

They take stock of the expected trends of foreign exchange rates to respond to any possible adverse conditions that might affect the national economy, Al-Haroon noted. Today’s decision considered the consumer price index and related pressures, given the open nature of the Kuwaiti economy. The Governor concluded that CBK shall continue its monitoring of the economic and monetary developments, and take the necessary actions, whenever needed, to shield the local monetary stability.

Dollar rises

Meanwhile, the US dollar on Wednesday climbed by 0.05 percent to KD 0.307 but the euro dropped by 0.27 percent to KD 0.321, compared with Tuesday’s prices, the Central Bank of Kuwait (CBK) said in its daily bulletin. The sterling pound fell by 0.55 percent to KD 0.372, but the Swiss franc firmed at KD 0.325, as well as the Japanese yen, trading at the unchanged rate of KD 0.002. The CBK publishes daily average exchange rates that do not necessarily reflect actual prices of currencies for the day. – KUNA

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