Nod to more muscle for CBK to regulate liquidity

This news has been read 3315 times!

KUWAIT CITY, Aug 7: The Central Bank of Kuwait (CBK) and the Kuwait Petroleum Corporation have sought permission to increase the ceiling of their General Reserve Fund balances, aiming to enhance their financial capabilities and achieve greater independence in pursuing their supervisory and development objectives, reports Al-Rai daily.

Traditionally, the CBK has transferred its annual net profits to the reserve fund. However, to bolster its capacity and intervention tools for regulating the liquidity of the banking sector, the CBK has requested approval to retain its net profits until the fund reaches a higher ceiling. This move has been approved after extensive discussions with the Ministry of Finance. The CBK’s proposal entails stopping the transfer of net profits to the general reserve until the new reserves reach a maximum amount of 5 billion dinars, which is four times higher than the previous ceiling of 1 billion dinars.

This measure would enable the CBK to closely monitor interest rates in both local and foreign markets and effectively adjust its monetary and credit policy. Moreover, it would increase reserves of hard currency, enhancing the central bank’s ability to address economic challenges effectively. However, implementing this strategy may pose challenges to public finances, as the 2023- 2024 budget is expected to result in a record deficit of 6.8 billion dinars.

This news has been read 3315 times!

Related Articles

Back to top button

Advt Blocker Detected

Kindly disable the Ad blocker

Verified by MonsterInsights