Kuwait’s economic data, inflation prompted CBK rate hike: Bouresli

Kuwait’s economic data, inflation prompted CBK rate hike: Bouresli

By Majd Othman

KUWAIT: The Central Bank of Kuwait (CBK) raised the discount rate for the fifth time this year by about a quarter of a percentage point, from 2.5 to 2.75 percent, with the aim of maintaining the attractiveness of the dinar, expanding the margin between the domestic discount rate and the US interest from its narrowest level in a century, according to the latest banking data.

The Central Bank also clarified that the maximum limits for interest rates on lending transactions in dinar, setting the new interest for commercial lending transactions and other forms of lending with a duration of no more than a year at 5.25 percent, and a duration of more than one year at 6.75 percent, while setting the interest on consumer loans and housing at 5.57 percent.

In an interview with Kuwait Times, Amani Bouresli, former minister of commerce and industry and finance professor at Kuwait University, spoke about the possible impact of CBK’s decision to raise the discount rate on Kuwait economy and businesses.

Bouresli said since the Kuwaiti dinar is partially pegged to the US dollar, there will certainly be a local consensus to raise the interest rate in tandem with the increase in the US