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Kuwait central bank revamps monetary policy tools
Kuwait's central bank revamped its monetary policy tools on Wednesday by introducing new repurchase agreements to give banks more access to short-term funding.
- Agencies
- Published: 10:10 November 19, 2008
Kuwait: Kuwait's central bank revamped its monetary policy tools on Wednesday by introducing new repurchase agreements to give banks more access to short-term funding.
The central bank said banks could now borrow funds from it under repo agreements with maturities of one day, one week and one month. So far, the bank had only been offering a one-week repo.
The central bank set the overnight repo rate at 1 percent, the one-week rate at 2 percent and a one-month rate at 3 percent.
"This is to provide short-term liquidity to the market," said Kuwait Finance House Treasurer Abdul-Wahab al-Rushood. "It is offering banks more tools for short-term liquidity from the central bank in case the interbank market is tied up."
Like its neighbours in the world's biggest oil-exporting region, Kuwait has taken a number of steps to help banks cope with the fallout of a global financial crisis and unfreeze frozen credit markets.
The central bank has slashed its discount rate by 150 basis points since October, passed laws guaranteeing bank deposits and had its sovereign fund pump money into its ailing stock market.
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