CBK keeps rates on hold after Fed hike
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Saudi, UAE, Bahrain and Qatar raise rates 25 bps, following Fed
KUWAIT CITY, Sept 27, (Agencies): The Central Bank of Kuwait decided Wednesday to keep the discount rate unchanged at three percent and continue the current monetary policy.
The decision is meant to enhance the competitive edge of the national currency and the economic growth at the non-oil sector, CBK Governor and Board Chairman Dr Mohammad Al-Hashel said in a statement to KUNA.
To boost the competitiveness of the national currency for local savings is one of the main targets of the monetary policy of the bank, he pointed out. The board of directors decided also to continue using the available tools of the monetary policy, including the treasury bonds, the depositing system of the local banks and the direct intervention, in the framework of keeping watch for economic and financial developments.
The CBK decision came after regular revision of the trends of interest rates on global currencies, notably the US dollar, Dr Al-Hashel revealed. It also came in the light of the decision earlier today of the Board of Governors of the US Federal Reserve to raise the interest rate paid on required and excess reserve balances to 2.20 percent, effective Sept 27, 2018.
The CBK decision is also based on meticulous reading of the latest economic and monetary information, including the data of economic activity, the indicators of local liquidity, the trends of crediting and depositing, and the interest rates on Kuwaiti dinar (KD) and major foreign currencies. These information and data are the main parameters that govern the way of setting the local interest rates and discount rate, Dr Al-Hashel went on.
To keep the interest rates on depositing in KD and the discount rate for intra-bank loans at low levels helps increase the competitiveness of the local currency and encourages borrowers given the slow pace of growth in the non-oil economic sectors. Meanwhile, the United Arab Emirates central bank said on Wednesday it was raising its repo rate by 25 basis points, and also raising interest rates on the issuance of its certificates of deposit in line with the increase in US dollar rates.
The central bank was acting after the US Federal Reserve hiked rates by 25 bps. Saudi Arabia’s central bank said on it was raising its reverse repo rate by 25 basis points to 2.25 percent, and its repo rate by the same margin to to 2.75 percent. It was acting after the US Federal Reserve hiked rates by 25 bps. Bahrain’s central bank raised its interest rate on its one-week deposit facility to 2.50 percent from 2.25 percent, it said on Wednesday. It also raised its overnight deposit rate to 2.25 percent from 2.00 percent, its one-month deposit rate to 3.25 percent from 3.00 percent, and its lending rate to 4.25 percent from 4.00 percent.
It was acting after the US Federal Reserve raised its interest rates by 25 basis points. Qatar central bank says it raised deposit rate by 25 basis points to 2.25 percent, the state news agency said on Thursday.
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