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Kuwait revamps monetary tools
Kuwait's central bank revamped monetary policy tools yesterday by introducing new repurchase agreements as Gulf Arab oil producers stepped up efforts to boost bank liquidity and bolster investor confidence.
- Reuters
- Published: 23:15 November 19, 2008
Kuwait: Kuwait's central bank revamped monetary policy tools yesterday by introducing new repurchase agreements as Gulf Arab oil producers stepped up efforts to boost bank liquidity and bolster investor confidence.
In the latest move by Gulf states to unthaw credit markets, Kuwait's central bank said it would offer repo agreements with maturities of one day and one month from yesterday, in addition to the one-week repo it had offered previously.
Endeavouring to calm investors, Kuwait this week asked its sovereign wealth fund to invest in stocks, as Bahrain looks to improve deposit guarantees and United Arab Emirates committees meet on how to tackle the world financial crisis.
Kuwaiti shares, down more than 30 per cent this year, led gains on some Gulf markets yesterday as investors took the central bank's move as a cue the state would take an active role in calming the market.
"The fear of [a lack of] liquidity is no longer there in the market," said Arunesh Madan, vice president of treasury at Kuwaiti investment bank Global Investment House.
Analysts said the central bank deliberately set the new rates well below levels on the interbank market.
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