Credit by Kuwaiti banks witness 4.3% jump
KUWAIT CITY, Feb 13: The credit granted by Kuwaiti banks witnessed a 4.3% jump during 2019 by end of the year to record 38.4 billion dinars, which is the highest which means citizens and residents have borrowed about 1.57 billion dinars during the past year, compared to the credit levels of 36.85 billion dinars by the end of December 2018, reports Al-Anba daily.
This jump in the volume of credit during the past year comes as a result of the decisions issued by the Central Bank of Kuwait at the end of November 2018 to raise the ceiling of borrowing in Kuwait from 15 times of the salary amount to 25 times, which paid off during the past year, and increased the levels of credit in the Kuwaiti banking sector.
This also comes in conjunction with the Central Bank of Kuwait keeping the discount rate in the country at 3% for two consecutive times during the months of July and September 2019, while the CBK reduced the discount rate to the level of 2.75% at the end of last October, as these steps strengthened the high levels of credit granted from Kuwaiti banks.
On the level of monthly credit levels, it increased by the end of last December by 0.47% at a value of 182 million dinars, compared to last November, whose credit amounted to 38.24 billion dinars, according to the CBK data for December 2019.
The consumer loans intended for the purchase of durable goods and cars witnessed a monthly increase of 2.8% at a value of 40 million dinars at the end of last December to reach 1.44 billion dinars compared to 1.4 billion dinars last November.
Also, the installment loans granted to Kuwaitis for the purpose of renovating or buying private housing increased by a rate of 0.1% and the value of 13 million dinars at the end of December, to reach 11.96 billion dinars, compared to 11.94 billion dinars at the end of November.
During 2019, consumer loans recorded the biggest jump in the credit sectors granted by Kuwaiti banks, as it increased by 36% during the year at a value of 382 million dinars, while the real estate loan sector recorded the second highest increase during the past year, up 9.3% and valued at 761 million dinars, to reach real estate loans which amounted to 8.9 billion dinars, while installment loans recorded an annual increase of 2% at a value of 237 million dinars. On the other hand, loans directed to purchase securities witnessed an annual decline of 1.6% and a decrease of 42 million dinars to reach 2.63 billion dinars, compared to their levels at the end of December 2018 of 2.67 billion dinars.
In terms of banking sector deposits, it increased by 0.15% to reach 43.62 billion dinars at the end of last December, compared to 43.56 billion dinars at the end of last November, and on an annual basis, deposits increased by 0.33%, an increase of 143 million dinars in the volume of deposits compared to December 2018 levels, knowing that the record had been achieved by the end of June 2019 of 44.02 billion dinars.
The government raised its deposits with Kuwaiti banks by 208 million dinars by the end of December 2019, bringing the total government deposits in the banking system to 7.39 billion dinars, a monthly increase of 2.9%, and annually it increased by 11.4% compared to its levels at the end of December 2018, which amounted to 6.63 billion dinars, so that the government has thus It increased its deposits with Kuwaiti banks by 755 million dinars during the year.
On the private sector level, deposits in Kuwaiti dinars increased by 0.03% per month at the end of December to reach 33.71 billion dinars, after the private sector increased its deposits by 11 million dinars during last December, while private sector deposits in dinars decreased annually by 527,000 dinars From their levels by the end of December 2018. At the end of December 2019, the private sector deposits in foreign currencies also decreased, as it decreased by 5.7% to reach the level of 2.53 billion dinars at the end of the month.
Also, deposits of the private sector in foreign currencies decreased by 3.2%, down 85 million dinars from the levels of December 2018 and amounting to 2.616 billion dinars. With regard to the general reserve of Kuwait, it recorded a monthly decrease of 156 million dinars at the end of last December, to reach the level of 12.09 billion dinars, a monthly decrease of 1.27% compared to its levels of 12.25 billion dinars at the end of last November.
These reserves do not include the foreign assets of the Kuwait Investment Authority and consist of cash gold balances, the status of the reserves at the International Monetary Fund and special drawing rights and currency.
According to the data of Kuwait’s reserve assets list issued by the Central Bank of Kuwait, the main reason behind the decline of Kuwait’s general reserve to this level is the decline in the country’s cash reserves from foreign exchange by the end of last December to reach 11.33 billion dinars, a decrease of 165 million dinars, or 1.4% last November.
Since the beginning of the current year, the general reserve of Kuwait has jumped by 6% at a value of 691 million dinars, supported by the increase in foreign exchange in the country by 670 million dinars and by 6.3%. According to the statistics, the general reserve of Kuwait does not include foreign assets with the Kuwait Investment Authority, as it includes the gold owned by the country’s monetary authority of 31.7 million dinars, and is held as reserve assets, in addition to the foreign exchange reserves in the country, and the reserves deposited with the International Monetary Fund. Foreign currency reserves for Kuwait consist of paper and metal money in circulation in foreign currencies that are generally used to make payments, and commemorative metal money is excluded from them, while deposits included in reserve assets are deposits with foreign central banks, the Bank for International Settlements, and other banks, and the meaning of deposits here is the available deposits upon request.
Finally, the foreign assets are at the disposal of monetary authorities and they are under their control to meet the needs of the balance of financing payments, or to interfere in the exchange markets to infl uence the exchange rate of the currency, or other related purposes.
With the volume of reserves deposited with the International Monetary Fund at the end of last December, about 165.7 million dinars, an increase of 29.2% during the year, at a value of 37.5 million dinars, compared to their levels of 128.2 million dinars at the end of last January.
The reserve situation in the International Monetary Fund consists of the reserve segment, that is, the foreign currency amounts that the member country may withdraw from the International Monetary Fund within a short period of time, and debts on the International Monetary Fund (under a loan agreement) in the public resources account, and they are at the disposal of the member country including That is, lending the reporting country to the IMF under general borrowing agreements, new borrowing agreements, and claims on the fund written with special drawing rights are claims in foreign currency.
The amount of private drawing rights amounts to about 563.9 million dinars, a decline of 3% during 12 months compared to their levels at the end of last January, which amounted to 580.6 million dinars, which are international reserve assets created by the International Monetary Fund as a supplementary reserve for the reserve assets of the member countries of the fund, and the fund distributes special drawing rights between Its members are based on their percentage shares in the fund.