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Kuwait halts dollars for forex trade

The Kuwait central bank is no longer allowing local banks to buy dollars from it and sell them to it for currency trades, bankers said on Monday, a move that has blocked offshore banks from betting on the dinar.

  • Reuters
  • Published: 23:25 August 4, 2008
  • Gulf News

Kuwait, Dubai: The Kuwait central bank is no longer allowing local banks to buy dollars from it and sell them to it for currency trades, bankers said on Monday, a move that has blocked offshore banks from betting on the dinar.

The central bank has notified lenders in the state that it is reverting back to a previous system whereby it will only buy or sell dollars to them for commercial purposes, not to cover interbank transactions, bankers in Kuwait and Dubai said.

The move could be designed to clamp down on speculators by stopping local banks from using cheap central bank liquidity, a common practice, some bankers said.

"The central bank has informed banks in Kuwait of the change through its channels," said a treasurer at Kuwait's Gulf Bank.

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