Kuwait Times, Sunday, Jan 29, 2023 | Rajab 7, 1444
CBK raises discount rate to 4.0%
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.