Kuwait City: The Central Bank of Kuwait (CBK) has announced that its current assessment of economic and financial data reflects the continued safety and resilience of the country’s monetary system and financial stability.
According to Kuwait News Agency, the assessment is based on CBK’s ongoing monitoring of economic and monetary variables and indicators in international markets, geopolitical developments, as well as the impacts of global economic conditions on the local economy. The Bank highlighted this in a press release on Thursday.
In terms of monetary policy developments, the CBK has adopted a gradual approach to the monetary tightening cycle in recent periods. This approach has ensured an optimal balance of its objectives, which aim at maintaining monetary and financial stability and boosting economic growth. Since March 2022, the CBK has increased its discount rate nine times by a cumulative 275 basis points to 4.25 percent as of July 26, 2023. This is in line with its monetary policy, which is dee
med appropriate to the local economic conditions, contributing to controlling inflation and stabilizing growth in non-oil sectors.
Moreover, the exchange rate regime offers relative flexibility and serves as an anchor for monetary policy, according to the CBK statement. The resilience of the Kuwaiti banking sector plays a significant role, attributed to CBK’s prudent regulatory requirements and judicious lending and provisioning practices. This was mentioned in the Concluding Statement issued on October 10, 2024, by the International Monetary Fund’s Mission to the State of Kuwait.
Based on vigilant monitoring of local and global economic indicators and considering the end of the monetary tightening cycle in most global central banks, the CBK reduced the discount rate by 25 basis points to 4.00 percent on September 19, 2024.
Macroeconomic indicators show a decline in the inflation rate from 4.71 percent in April 2022 to 2.75 percent in September 2024, underscoring continued relative stability in the exchang
e rate of the Kuwaiti Dinar against major currencies. On the monetary and banking indicators side, residents’ deposit balances with the banking system grew by 6.7 percent at the end of September 2024 compared to the end of September 2023. The private sector’s KWD deposits accounted for 95.2 percent of total private sector deposits at the end of September 2024.
Additionally, the balances of credit facilities (for residents and non-residents) increased by 5.7 percent at the end of the mentioned month compared to the end of the corresponding month of the previous year.
The CBK reiterated its commitment to continue close monitoring of economic and monetary developments in international markets to assess potential effects on the local economy, with a view to ensuring monetary and financial stability and promoting economic growth.