Money Exchange Companies in Kuwait Rocked by Illicit Transfers Scandal

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KUWAIT CITY, Feb 20: Over the past year, exchange companies suffered from illegal “black market” money transfer activity on some currencies, especially the Egyptian pound and the Indian rupee, especially in light of the large fluctuations in their exchange rates, which led to the erosion of about 41.3 % of their profits during 2023.

The profits of 32 Kuwaiti exchange companies, overseen by the Central Bank and members of the Kuwaiti Union of Exchange Companies, have dwindled to approximately 25.2 million dinars, marking their lowest levels in three years. This decline contrasts sharply with the 2022 figures, which stood at 43 million dinars, following a peak of 45 million dinars in 2021 and 36.3 million dinars in 2020.

According to banking sources cited by Al-Seyassah, the fluctuation of exchange rates has provided opportunities for illicit parties to exploit, resulting in money transfers at inflated prices and operating outside the purview of banking regulations. Consequently, this trend has hampered the revenues of exchange companies Data from the Central Bank of Kuwait underscores this downturn, revealing a consecutive annual decrease of 41.3 percent in the net profits of exchange companies during 2023, attributed to rising expenses and operational burdens coupled with declining revenues.

In 2023, exchange companies reported a net profit of 25.29 million dinars, significantly lower than the 43.09 million dinars recorded in 2022. The increase in expenses, totaling 54.87 million dinars, up by 10.22% compared to the previous year, contributed to this decline. Administrative and banking expenses amounted to 44.09 million dinars, with bank interest reaching 945.4 thousand dinars and allocations totaling 8.66 million dinars, alongside 1.17 million dinars in other expenses. Despite these challenges, revenues from exchange activities increased by approximately 13.68% to 80.16 million dinars in 2023, albeit lower than the 92.87 million dinars recorded in 2022. At the end of December 2023, the total assets of exchange companies operating in Kuwait reached about 298.1 million dinars, up from approximately 283.3 million dinars in December 2022.

By Mahmoud Shendi
Al-Seyassah/Arab Times Staff

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