Tuesday, 21 July 2009 at 17:36, Reuters, Kuwait
Kuwait's central bank reduced its three repurchase rates by 25 basis points each today to encourage lending, but left its benchmark discount rate.
The central bank cut its overnight repo rate to 0.75 percent from 1 percent, and reduced its one-week repo rate to 1.75 percent from 2 percent, while its one-month rate is now at 2.25 percent down from 2.5 percent, official data showed today.
The bank, which left its discount rate unchanged at 3 percent, last reduced the one-month repo in December, moving it to 2.5 percent but left the rest untouched.
"Growth is slowing, inflation is no longer a concern. My only surprise is that they haven't cut earlier or more broadly," said HSBC economist Simon Williams in Dubai.
Annual inflation in Kuwait fell to 5.9 percent in February from 6.8 percent in January, its lowest level in 15 months.
Like its neighbours in the world's biggest oil-exporting region, Kuwait has taken a number of steps to help banks cope with the fallout of a global financial crisis and unfreeze frozen credit markets.
Kuwait, the only Gulf state that does not peg its currency to the U.S. dollar, revamped monetary policy tools last year by introducing new repurchase agreements to give banks more access to short-term funding.
Your comments