CBK Unveils Liquidity Management and Forecasting Dashboard
His Excellency the Governor of the Central Bank of Kuwait (CBK) Dr. Mohammad Y. Al-Hashel announced CBK’s live and consolidated “Liquidity Management and Forecasting Dashboard”, which enhances the ability to forecast liquidity conditions more accurately and at an earlier point in time, in turn leading to more efficient utilization of monetary policy instruments.
Unveiling the dashboard, the Governor noted that “Liquidity management is of utmost importance to the economies of the countries of the Gulf Cooperation Council (GCC), due to multiple factors affecting liquidity levels. Being oil-producing states, their currencies are pegged to foreign currencies so not only are their revenues susceptible to fluctuations in oil prices, but also to fluctuations in foreign exchange rates brought about by global economic and geopolitical developments.”
The Governor pointed out that “Any change in liquidity levels or volume of demand for the Kuwaiti Dinar could effect the rate of return in the monetary market. Therefore, forecasting liquidity conditions can help the CBK decide if intervention is required, through the utilization of monetary policy instruments, and can indicate the volume of liquidity to be injected into or pulled out of the market.” Dr. Al-Hashel stressed that predicting liquidity conditions allows the CBK to manage future changes in these factors to stabilize liquidity conditions. It also helps the Bank to establish indicators for the rate of return in the monetary market.