Press Releases

In a statement to the Kuwait News Agency (KUNA), H.E. the Governor of the Central Bank of Kuwait (CBK), Sheikh Salem Abdulaziz Al-Sabah, announced that CBK's Board of Directors has decided to raise its discount rate by half a percentage point to 4% from 3.50%. H.E. the Governor explained that the decision came within the context of CBK's continual review of the domestic economic, monetary and banking developments on the one hand, and the trends in interest rates on major currencies on the other, and its efforts towards strengthening the foundations of monetary stability in the country and providing a climate conducive to a balanced and sustainable economic growth.

H.E. the Governor added that, of late, the accelerating pace of economic activity in many non-oil sectors and the resulting growing demand for bank credit necessitated raising the discount rate, in order to maintain the attractiveness of the Kuwaiti dinar as a main store of domestic savings; noting that these savings are the main resource which domestic banks draw on to meet the financing needs of the national economic sectors, particularly in light of the uptrend in interest rates on major currencies worldwide.

It is noted that the discount rate is key to the domestic interest rate structure, as the ceilings of interest rates on KD-denominated loans extended by local banks to their customers are linked to the discount rate within specified margins. The last change to the CBK discount rate took place on the first of July 2004, when it was raised by a quarter percentage point to 3.50%.