Banks’ demands on the government declined from the beginning of the year until the end of the first half of this year by 403 million dinars, from 1.13 billion to 734 million, or 35.4%. These banking demands on the government are represented in the public debt instruments of local banks, including government securitization operations for more than a year, acquired from Islamic banks, in addition to dollar government bonds.

A local Arabic daily quoting banking sources said these debts are classified as zero-risk sovereign debt, and therefore do not constitute any burden on banks’ balance sheets, and added, the banking sector considers the burden among the least in the world, as the government depends mainly on its oil revenues and in the second place the general reserves, even during periods of sharp decline in oil prices, it resorted to borrowing from the public reserve and carried out operations and faltering the project of issuing bonds amid the most difficult stages of liquidity scarcity that was manifested during the pandemic crisis and the decline in oil prices to the level of $ 16 as well as at the height of the decline in interest rates globally, which represented an opportunity to borrow, but despite all these facts and challenges, the government did not resort to expanding this item.

It should be noted that the public borrowing file, in light of the rapid movement of interest levels and the significant improvement in oil prices, will not be on the table and will not be re-discussed, especially since the pressing justifications have almost disappeared, namely, the rise in the deficit, the scarcity of liquidity and the decline in oil prices.

Even at the level of domestic debt vis-à-vis banks, it is expected that it will decline until the end of the year, when the dues will be paid on their due dates.


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