Central Bank of Kuwait Governor Dr. Muhammad Youssef Al-Hashel explained in an interview with the Capital Markets Authority magazine, that the crises of the past decade have taught valuable lessons, starting with the mortgage crisis triggered by the bankruptcy of Lehman Brothers in 2008, then the collapse of oil prices in 2014, leading to the current crisis as a result of the Corona pandemic, Al Anbaa reported.
Al-Hashel said that although the crisis was caused by non-economic reasons, it led to the suspension of production, decline in Supply and Demand. This led to huge economic losses, job losses, accompanied by the deterioration of oil prices, which posed a double challenge to the oil-producing countries.
Al-Hashel stressed that the Central Bank of Kuwait learned these lessons early on and translated them into practical measures to consolidate monetary and financial stability in the country so that Kuwait enjoys a financial system that is one of the strongest, safest, and most stable in the region.
To this end, the Central Bank of Kuwait adopted a proactive approach. It took the initiative to draw up a prudent monetary policy, as described by the International Monetary Fund, realizing the three basic constants of its monetary policy, through the relative stability of the exchange rate of the national currency against international currencies, maintaining interest rates at levels that promote healthy growth of the economy in its various sectors, and consolidating the attractiveness of the Kuwaiti dinar as a reliable and rewarding vessel for domestic savings.
The Central Bank of Kuwait also worked to consolidate the foundations of good governance by building a system of policies and procedures that control the banking sector with the highest standards of governance practiced globally. It issued ‘Governance Rules and Systems in Kuwaiti Banks’ and was keen to update them constantly.
This approach paid off, as it fortified Kuwaiti banks against the crises that came to be seen, and gave the banking sector immunity in the face of the Coronavirus pandemic and its deep and extended repercussions.