Economic Indicators Signal Continued Financial Stability -- CBK

11/8/2024 5:18:14 AM

(MENAFN- Kuwait News Agency (KUNA)) KUWAIT, Nov 7 (KUNA) -- The Central bank of Kuwait said its current assessment of the available economic and financial data demonstrate the continued safety and resilience of the monetary system and financial stability in the country.
The assessment is based on CBK's continuous monitoring of all economic and monetary variables and indicators in international markets and geopolitical developments, as well the impacts of the global economic conditions on the local economy, the Bank said in a press release on Thursday.
In terms of monetary policy developments, CBK had adopted a gradual approach for the monetary tightening cycle during the past period that ensured the optimal balance of its objectives aimed at maintaining monetary and financial stability and boosting economic growth.
Since March 2022, CBK has raised its discount rate nine times by a cumulative 275 basis points to 4.25 percent on July 26, 2023, in line with its monetary policy that stands appropriate to the local economic conditions and contributes to controlling inflation and stabilizing growth in the non-oil sectors.
Moreover, the exchange rate regime provides relative flexibility, and serves as an anchor for the monetary policy, according to the CBK statement.
The resilience of the Kuwaiti banking sector has a very prominent role thanks to the CBK's prudent regulatory requirements and judicious lending and provisioning practices, as mentioned in the Concluding Statement issued on October 10, 2024, by the International Monetary Fund's Mission to the State of Kuwait.
Based on its vigilant monitoring of the most important developments in local and global economic indicators, and given the end of the monetary tightening cycle in most global central banks, CBK lowered the discount rate by 25 basis points to 4.00 percent on September 19, 2024.
The data related to macroeconomic indicators reflect declining inflation rate from 4.71 percent in April 2022 to 2.75 percent in September 2024, and underscore the continued relative stability in the exchange rate of the Kuwaiti Dinar against major currencies.
On the monetary and banking indicators side, residents' deposit balances with the banking system recorded a growth of 6.7 percent at the end of September 2024 compared to the end of September 2023, while the private sector's KWD deposits accounted for 95.2 percent of total private sector's deposits at the end of September 2024.
The balances of credit facilities (for residents and non-residents) also grew by 5.7 percent at the end of the mentioned month compared to the end of the corresponding month of the previous year.
CBK reiterated commitment to continue its close monitoring of the economic and monetary developments in international markets to assess their potential effects on the local economy with a view to ensuing monetary and financial stability and promoting economic growth. (end)
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