CBK raises discount rate by 0.25 to 2.75 pct

KUWAIT, March 15 (KUNA) -- Board of Directors of the Central Bank of Kuwait (CBK) decided Wednesday to raise the discount rate by a quarter-percentage point to 2.75 percent from 2.50 percent.
The decision; to be effective as of tomorrow, March 16, is based on the continuous monitoring by CBK of the domestic economic, monetary and banking conditions, CBK Governor and Board Chairman Dr. Mohammad Y. Al-Hashel said in a press release He added that the decision is based on continuous monitoring by CBK of the domestic market, taking into consideration movements in interest rates on major international currencies.
Dr. Al-Hashel further explained that the decision to raise the discount rate reflects CBK's efforts to ensure the continued competitiveness and attractiveness of the national currency as a store of domestic savings.
These savings constitute a major source of funding provided by the local banking and financial units to the various sectors of the national economy and thus maintain a supporting environment for sustainable economic growth and development, he pointed out.
He noted that the discount rate in the State of Kuwait, which is set by the Board of Directors of CBK, is a central rate that sets within specified margins the maximum interest rates on KD borrowing from the local banking and financial units.
Accordingly, raising the discount rate will allow the CBK to utilize its monetary policy and liquidity management instruments to maintain the competitive and attractive returns on domestic KD savings compared with those on the major international currencies, particularly after the announcement by US Federal Reserve to raise the interest rates as of today.
He emphasized that CBK is keen to fulfill its responsibilities in the areas of monetary policy, banking oversight and supervision, as well as continue its monitoring of local and international economic developments and will move when necessary to ensure the enhancement of monetary and financial stability to support the sustainable growth and development of the national economy. (end) fnk.hb