Press Releases

04.05.22Press Release

CBK Raises Discount Rate by a Quarter Percentage Point

The Governor of the Central Bank of Kuwait (CBK), Basel A. Al-Haroon, stated that the CBK Board of Directors decided to raise the discount rate by 0.25% from 1.75% to 2.00% effective May 05, 2022. This decision reflects the CBK‘s vigilant monitoring of domestic and international economic and geopolitical developments that resulted in all-time high global inflation rates, mainly driven by increased commodity and energy prices and continuous supply chain disruptions, which constitute a key source of imported inflation affecting the consumer price index in the State of Kuwait.

The CBK decision considered the open nature of the Kuwaiti economy that necessitates a constant monitoring of international interest rates to determine the appropriate interest rate on the Kuwaiti Dinar.

The Governor stated that the CBK also decided to change the rates of monetary policy instruments by varying percentages for the entire interest rate yield curve. This includes repurchases (Repo), CBK bonds and tawarruq, term deposits, direct intervention instruments, as well as public debt instruments.

Al-Haroon added that the decision to raise the discount rate is intended to promote monetary stability, support the stability of the financial sector, maintain an environment conducive to economic stability considerate of inflation rates, and affirm the attractiveness of the Kuwaiti Dinar as a lucrative and reliable store for domestic savings.

The Governor concluded that CBK continues its vigilant monitoring of the local and international economic, monetary, and banking developments, and, whenever appropriate, shall use the available monetary policy instruments to safeguard financial and monetary stability.

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