Central Bank of Kuwait lowers interest rates by 0.25%

• By the end of July 2025, resident deposits in Kuwait’s banking system grew by about 4.2% annually, with private sector deposits in Kuwaiti dinars making up 94.3% of the total.

Following the US Federal Reserve’s 25-basis-point cut in interest rates to 4–4.25%, the Central Bank of Kuwait announced a similar 25-basis-point reduction in its discount rate, lowering it from 4% to 3.75%, effective September 18, Al Qabas newspaper reported.

The Central Bank stated that the decision reflects ongoing monitoring of global economic and monetary developments, including geopolitical shifts and trade policies, and their impact on Kuwait’s economy. Considering these factors and the local economic context, the bank opted to reduce the discount rate by 25 basis points to 3.75%, effective September 18.

In line with the above and amid developments in macroeconomic indicators, data show a slowdown in the inflation rate from 3.00% in July 2024 to 2.39% in July 2025, alongside the continued relative stability of the Kuwaiti dinar against major currencies.

Regarding monetary and banking indicators, by the end of July 2025, resident deposits in the banking system recorded annual growth of approximately 4.2%, with private sector deposits in Kuwaiti dinars accounting for 94.3% of total private sector deposits.

The Central Bank of Kuwait reaffirmed its commitment to a gradual and balanced approach to maintaining monetary and financial stability.

The central bank also emphasized its close monitoring of local and global economic, monetary, and banking developments, as well as interest rate trends on major currencies, and its readiness to employ appropriate tools and measures to enhance confidence in the national currency, support sustainable economic growth, and strengthen monetary and financial stability in the country.

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