KUWAIT CITY, Sep 7: Governor of the Central Bank of Kuwait Dr. Mohammad Al-Hashel said on Monday the CBK downgraded, during the fiscal year (2019-2020), the discount rate three times recording a historic level, 1.5 percent.
Dr. Al-Hashel, in a statement marking the CBK 48th annual report for the financial year (2019-2020) on Monday, SAID the report showed continuous follow-up on local economic, monetary and banking conditions in addition to monitoring developments such as trends of the interest rate on major foreign currencies.
The CBK during the financial year (2019-2020) decreased the discount rate three times; the first time on October 20 where it was cut by quarter of a percentage point, dropping from three to 2.75 percent.
In response to negative fallouts of the coronavirus outbreak on economic conditions in Kuwait, where easing monetary policies became warranted, the CBK on March 4 slashed the discount rate by quarter of a percentage point, followed with an identical move on March 16, also cutting it by a whole 100 percent and putting the discount rate at 1.5 percent, the lowest on record.
As to exchange rates, the CBK continued during the past fiscal year efforts to maintain relative stability of the Kuwaiti dinar rate against other currencies according to the existing system, pegging the KD to a special and well-balanced basket of other states’ currencies that have significant commercial and financial bonds with Kuwait.
Elaborating, Al-Hashel said the average rate of the KD against the USD for the past fiscal year amounted to 304.034 fils for a dollar, against 302.743 fils in the previous year with the rise of the USD by 1.290 fils, 0.43 percent.
Dr. Al-Hashel added that average difference between the highest rate, 309.900 fils, and the lowest price, 302.9 fils, for the dollar against the dinar during the past fiscal year amounted to 2.3 percent.
The broad money supply (M2) dropped by 2.4 percent in the end of the past fiscal year, compared to the end of the year before, Al-Hashel said, adding that cash assets from credit facilities from the local banks to various domestic economic sectors rose in the end of the fiscal year by 4.4 percent to KD 39 billion (USD 128.7 billion).
Residents’ deposits at the local banks rose 0.7 percent to reach, in the end of the fiscal year, KD 43.4 billion (USD 143.2 billion) in the end of the abovementioned year, while overall budgets of the local banks rose 7.9 percent to reach KD 72.7 billion (USD 239.9 billion).
The CBK issued on May 14, 2019, a circular to all local banks updating instructions that had been released on July 23, 2013, regarding money laundering and terrorism funding, with intention to ensure their literal commitments in this respect.
The CBK issued a circular on August 28, 2019, to all local banks, funding companies and exchange agenices with respect of the executive bylaw on implementing resolutions of the UN Security Council under Chapter VII of the UN convention concerning fighting terrorism and financing proliferation of mass destruction weapons.
The bank adopted on September 10, 2019, amendments to rules and governance systems for the Kuwaiti banks, recommending inclusion of independent members in boards’ line-ups, affiliate committeess, while affirming necessity of governance of hazard management
Dr. Al-Hashel affirmed that the central bank, as part of the efforts amid the coronavirus crisis, advised the local banks, on March 12, to continue offering basic financial services to the clients without interruption.
It also advised them to carry out the operations rapidly and efficiently, suspend fees on sales points, automatic machines and electornic means for six months.
Moreover, the CBK advised the banks to deal with a positive spirit with the clients, namely those whose businesses were damaged due to the coronavirus crisis, in addition to offering compensations to the banking staff who had to be physically at work places.
Furthermore, Al-Hashel revealed that they were also instructed to delay payment of due liabilities for those affected for six months without penalties and continue to provide services to commercial companies that import basic commodities namely food and other necessities.
Turning to the proportion of citizens employed by the CBK, he disclosed that there are 920 Kuwaitis among the total number of the employees, 1,003 (91.7 percent)