Press Releases

H.E. the Governor of the Central Bank of Kuwait (CBK), Sheikh Salem Abdulaziz Al-Sabah, announced in a press statement to the Kuwait News Agency (KUNA) that the CBK Board of Directors has decided to cut the CBK discount rate by 50 basis points to 5.75% from 6.25% effective from Wednesday, 23rd of January 2008. H.E. the Governor explained that the decision resulted from the continued surveillance by CBK of the developments in interest rates on major international currencies, particularly the US dollar, to ensure having consistent local interest rates on the Kuwaiti dinar (KD), taking into account the current domestic economic conditions.

H.E. the Governor added that this dose of discount rate cut by CBK reflects an attempt to strike a balance between the current developments in interest rates on major international currencies that require a matching measure to alleviate any negative impact resulting from maintaining unjustified wide interest rate spreads in favor of KD deposits versus deposits in major international currencies, on the one hand, and the existing current domestic economic conditions that require care and caution not to hastily cut local interest rate levels on the KD on the other hand.

The CBK discount rate is a benchmark to which interest rate ceilings on KD lending transactions of the local banking and financial system units are linked within certain margins. Therefore, a discount rate cut leads to similar reductions in these ceilings, in addition to its influence on interest rates on KD deposits.