The Governor of the Central Bank of Kuwait, Basel Ahmed Al-Haroun, said that the bank’s board of directors decided to raise the discount rate by half a percentage point, to become 4% instead of 3.5%, as of January 26, 2023.
Al-Haroun added, in a statement, that this decision came in light of the Central Bank’s continuous follow-up of developments in global and local economic conditions, developments in local monetary and banking indicators, and the movement of interest rates on the Kuwaiti dinar in the local market, taking into account the movement of changes in interest rates on major global currencies.
He explained that the Central Bank is pursuing a balanced and gradual approach to its monetary policy aimed at consolidating monetary stability and financial stability for the units of the banking and financial sector, and maintaining the competitiveness and attractiveness of the national currency as a container for local savings, which constitutes one of the main sources of financing provided by the units of the local banking and financial sector to the various sectors of the national economy, in order to create an atmosphere conducive to the continuation of economic growth on a sustainable basis.-
And Al-Haroun indicated that the decisions are based mainly on studying and analyzing the latest available economic, monetary and banking data and information, including general economic performance rates, inflation levels, local liquidity indicators, the movement of deposits and bank credit, and interest rates on the Kuwaiti dinar and major currencies, as these are Data is one of the most important determinants of the need to move domestic interest rates, the directions of movement of these prices, their amount, and the appropriate tools to achieve them.--
In making the decision, the various factors affecting the consumer price index were taken into account in order 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 emphasized the continuation of the approach of closely following developments and developments in the economic, monetary and banking conditions, and the readiness to move when needed to direct various monetary policy tools in order to maintain monetary and financial stability.