Kuwait plans bond sale this year to fill ’gap’ from falling oil

Dubai: Kuwait plans to sell dinar-denominated bonds this year as Gulf Cooperation Council countries seek to plug their budget deficits amid falling oil prices.

“We’re starting with local currency issues and then we’ll be shifting to foreign currencies later if needed,” Finance Minister Anas al-Saleh told reporters at a conference in Kuwait Tuesday. “We’re looking at alternatives to fill the current financial gap, including capital markets.”

Opec’s fifth-biggest producer may also sell dollar- denominated bonds if the dinar sale “has any impact or negative effect on our foreign reserves in the central bank and on the domestic market,” he said.

Kuwait is the most recent Gulf Cooperation Council state to turn to the bond markets as faltering prices for energy exports increase the risk of budget deficits. Saudi Arabia, the world’s largest crude exporter, sold 20 billion riyals ($5.3 billion) of bonds to local banks and public institutions last month. Brent, a global benchmark, has fallen about 19 per cent this year.

Kuwait is also working on legislation to allow the country to sell its first sukuk, or Islamic bond, al-Saleh said on Twitter in July.