KUWAIT: The Governor and the Chairman of the Board of Directors of the Central Bank of Kuwait (CBK), Basel A Al-Haroon stated that the CBK Board of Directors decided to raise the discount rate by 0.50 percent from 3.5 percent to 4.0 percent effective January 26, 2023.
The governor clarified that this decision came in light of recent developments in the local and international economic conditions, local monitory and banking indicators and movements on KWD interest rate in the local market considering the changes to the interest rates on the other major currencies.
The governor pointed out that the decision is in line with a progressive approach adopted by CBK to reinforce the financial and monetary stability of the banking and financial units, and maintain the attractiveness of the national currency as a lucrative and reliable store for domestic savings, which represent a main source of finance provided by the financial and banking units to the national economic sectors, and foster an environment conducive to economic sustainable growth.
The governor added that CBK decisions for monetary policy, including those related to local interest rates, are based on our review and analyses of the latest available economic, monetary and banking data, e.g. the economic performance ratios, inflation rates, local liquidity indicators, movement of deposits and bank credit, and interest rates on Kuwaiti Dinar and the other major currencies.
Such data are important for assessing the need to change local interest rates, movement of prices and amount thereof, and the appropriate instruments to address. The decision also considered the various factors affecting the consumer price index to identify the factors that put pressure on prices, in view of the nature of the Kuwaiti economy openness to the world.
The governor concluded that the CBK shall continue its monitoring of the local and international economic, monetary, and banking developments, and, whenever appropriate, shall take any additional measures to safeguard the financial and monetary stability in the country.