Kuwait City: Kuwait sought to restore confidence in its banking system on Monday by offering to pump cash into troubled Gulf Bank which has been hit by losses from derivative deals.
A delegation of disgruntled Kuwaiti stockbrokers marched to the Ruler's palace on Monday to ask him to temporarily close the plunging stock exchange as investors protested in Kuwait City's financial district against the government's handling of the global financial crisis and urged the cabinet to resign.
Figures released on Monday showed inflation in July remained above 11 per cent, ratcheting up pressure on the government to do more to soften the impact of the global crisis on ordinary citizens and small investors.
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Central Bank Governor Shaikh Salem Abdul Aziz said Gulf Bank depositors did not need to worry as the central bank was ready to provide the necessary liquidity and the government was preparing an urgent bill to guarantee deposits at all banks.
"The central bank is ready to pump the necessary liquidity into Gulf Bank in case money is needed to tackle any withdrawal of deposits," Shaikh Salem told state news agency KUNA.
Gulf Bank said it had seen some deposit withdrawals but not in significant amounts.
"The central bank fully stands beside us ... Things will calm down," general manager for board affairs Fawzy Al Thunayan said. Asked about clients lining up outside the bank's headquarters after news of the trouble on Sunday, Thunayan said: "It's [the] time of salaries...It's the end of the month."
More than 60 investors protested outside the bourse building, opposite Gulf Bank in Kuwait City's financial district, demanding the government step down for failing to deal with the financial crisis as stocks continued to fall.
Abdullah Al Hajiri, a spokesman for the traders, said some 500 Kuwaitis were prepared to demonstrate, but he persuaded them to instead send a small delegation to the emir's office at Seif Palace, not far from the exchange.
They did not get the audience with Shaikh Sabah Al Ahmad Al Sabah, but palace security promised they would, Al Hajiri, a former banker, told reporters at the exchange.
