The Central Bank of Kuwait announced that its current assessment of local economic and financial data indicates the continued soundness and resilience of Kuwait’s monetary and financial stability.
The Central Bank of Kuwait made this statement as part of its ongoing efforts to monitor economic and monetary indicators, as well as geopolitical developments in global markets. It emphasized the importance of understanding how these factors impact global economic conditions and their effects on Kuwait’s economy.
The bank noted that policy responses would be tailored to the unique needs and characteristics of Kuwait’s national economy, based on these evolving conditions.
The Central Bank stated that its recent monetary tightening cycle followed a gradual approach, which helped achieve an optimal balance between its objectives of maintaining monetary and financial stability and supporting economic growth.
Moreover, it was added that since March 2022, the Central Bank of Kuwait has raised the discount rate nine times, totaling 275 basis points, reaching 4.25% as of July 26, 2023.
This monetary policy aligns with local economic conditions, helping to contain inflation and stabilize growth in non-oil sectors. It was also noted that the exchange rate system provides flexibility to monetary policy, serving as a key pillar of stability.
Additionally, Kuwait’s banking sector remains robust, supported by the Central Bank’s prudent regulatory requirements in lending and sufficient provisioning.
This was confirmed by the final statement of the International Monetary Fund mission to the State of Kuwait issued on October 10, 2024.
The Central Bank of Kuwait, after a careful assessment of key local and global economic indicators and observing the end of the monetary tightening cycle in most major central banks, reduced its discount rate by 25 basis points to 4%, on September 19, 2024.
Macroeconomic indicators show a decrease in the inflation rate from 4.71% in April 2022 to 2.75% in September 2024, along with continued relative stability in the exchange rate of the Kuwaiti dinar against major currencies.
Regarding the monetary and banking indicators, it revealed a 6.7% growth in residents’ deposits in the banking system by the end of September 2024, compared to the end of September 2023. The private sector deposits in Kuwaiti dinars accounted for 95.2% of total private sector deposits as of September 2024.
Credit facilities balances for both residents and non-residents saw a growth of approximately 5.7% by the end of September 2024, compared to the same period in the previous year.
The Central Bank of Kuwait concluded its statement by emphasizing its ongoing monitoring of economic and monetary developments in international markets and their potential impact on the local economy.
The Central Bank assured that it would continue to conduct comprehensive reviews and take necessary measures, using its monetary policy tools in a balanced and gradual approach. This will be done to strengthen monetary and financial stability, and support economic growth in Kuwait.
