Kuwait cenbank keeps discount rate at 3 pct

Bahrain raises key interest rate by 25 basis points

KUWAIT CITY, June 13, (Agencies): The Central Bank of Kuwait (CBK) decided to keep its discount rate unchanged, its current position 3 percent, CBK Governor and Chairman of the board of directors, Dr Mohammad AlHashil said on Wednesday.

In a statement, Al-Hashil told KUNA, that the decision to keep the discount rate as is comes in support for a recovered economic growth rates, and to continue moving utilizing the tools and procedures of monetary policy available to him to establish the appeal and competitiveness needed to the national currency, making it as a profitable and reliable domestic savings.

Al-Hashil pointed out that as part of their “continuous monitoring to economic developments, monetary and banking conditions, and their expected trends and periodic review, including developments in interest rate trends on global currencies, namely the US dollar and the decision of the US Federal Reserve at its meeting today to raise interest rates, they decided to keep the discount rate unchanged.” Al-Hashil added “the decision to continue to use available monetary policy instruments and procedures, including central bank bonds, including other measures from local banks, and direct intervention, reflects the Bank’s keenness to “enhance economic growth rates for the non-oil sectors and to consolidate the competitiveness and appeal to the national currency,” he added.

CBK Chief also said that the decision to keep the discount rate unchanged was also based on current available data, and the ability of local banks to absorb efforts by CBK to enhance the interest rates on deposits, in the dinar, within the existing maximum rates of loan interest, and taking into consideration current discount rate.

Al-Hashil mentioned that competition between local banks are working to attract borrowers in light of the modest growth rates of domestic bank credit linked mainly to the modest economic activity in the non-oil sectors.

Al-Hashil noted that the available up to date data indicate that the central bank is able to maintain the margin of stability between interest rates on deposits in Kuwaiti dinars and interest rates on deposits in US dollars, with the remaining margin in favor of deposits in dinars.