Volume of loans procured by local banks surges in 1st 10 months of yr

Upswing translates to an annual surge of 36.2%

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KUWAIT CITY, Dec 23: The initial ten months of 2023 have witnessed a substantial upswing in the volume of loans procured by local banks in Kuwait from their foreign counterparts. The surge amounted to a notable 22.2 percent increase, reaching 240.2 million dinars. This surge marks a considerable shift from the 1.081 billion dinars recorded at the conclusion of December 2022 to an elevated figure of 1.321 billion dinars as of October 2023. This escalation indicates both a monthly spike of 5.9 percent, totaling 74.1 million dinars, and an annual surge of 36.2 percent, amounting to an impressive 351.2 million dinars in comparison to the corresponding period in October 2022. Conversely, the borrowing activities of foreign banks from their Kuwaiti counterparts experienced a decline over the course of the ten-month span. This decline amounted to a decrease of 8 percent, totaling 173.9 million dinars.

The overall figure retreated from the recorded 2.169 billion dinars in December 2022 to stand at 1.995 billion dinars by the end of October 2023. While there was a marginal 0.6 percent monthly uptick, representing 11.4 million dinars from September 2023, the annual drop reached 12.1 percent, equating to a decrease of approximately 275.6 million dinars relative to the scenario in October 2022. In the realm of credit facilities and loans provided to non-residents, there was a discernible uptick over the ten-month period, reflecting a 5.5 percent increase amounting to approximately 186.2 million dinars. The aggregate sum ascended from 3.393 billion dinars in December 2022 to 3.579 billion dinars by the end of October 2023. On a monthly basis, this increase represented a modest 0.16 percent, equivalent to 5.8 million dinars, from the situation in September 2023. On an annual scale, there was a noteworthy 3 percent increase, constituting a growth of about 105 million dinars when compared to the status in October 2022. This surge in mutual loans between local and foreign banks is occurring amidst successive increases in local and global interest rates.

These increments are notably led by the US Federal Reserve, which is endeavoring to mitigate the strongest surge in inflation witnessed in more than four decades, thereby averting a potential recession in the world’s largest economy. In response, most global central banks are aligning with the Federal Reserve’s strategy by augmenting interest rates, aiming to uphold the strength and competitiveness of their respective currencies. The Central Bank of Kuwait has actively pursued strategies to enhance cash flows between the banking sector and sectors of the national economy. Concurrently, it aims to maintain the attractiveness of the Kuwaiti dinar as a remunerative and reliable vessel for savings. In alignment with this objective, the Central Bank raised interest rates seven times throughout 2022, closely mirroring the Federal Reserve’s adjustments. These increments commenced from 1.50% and culminated at 3.50% by December 7, 2022.

By Ahmad Fathi
Al-Seyassah/Arab Times Staff

This news has been read 1256 times!

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