The Central Bank of Kuwait announced the issuance of bonds and tawarruq worth KWD200 million ($660 million). The bank revealed that this issuance comes with a three-month term and a yield rate of 4.125 percent.
This recent allocation follows the Central Bank of Kuwait’s earlier issuance of KWD240 million ($792 million) in bonds and tawarruq on December 30, 2024, which shared the same yield rate. On December 16, the Central Bank of Kuwait also disclosed a similar bond and tawarruq issue, valued at KWD240 million and with an identical yield rate. Moreover, on September 9, the bank unveiled another allocation of bonds and tawarruq, maintaining the same total value, maturity, and yield rate.
Earlier, in April 2024, the Central Bank of Kuwait (CBK) announced the issuance of bonds and tawarruq totaling KWD240 million. As reported by the Kuwait News Agency (KUNA), this particular issuance also had a duration of three months, offering a return rate of 4.375 percent.
In October 2023, the CBK again allocated KWD240 million for a three-month term for similar types of issuances, continuing with the 4.375 percent return rate. In June 2023, the bank allocated the same amount for a three-month duration but offered a slightly lower return of 4.250 percent. Additionally, a notable issuance of KWD230 million was made over six months, featuring the same return rate of 4.375 percent. Furthermore, in May 2023, the CBK issued bonds and tawarruq totaling KWD240 million.
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What is the purpose of bond and tawarruq issuances?
Bonds function as essential instruments for governments to secure funding, promising to repay the principal along with interest to bondholders upon maturity. Conversely, tawarruq enables businesses to convert funds or debts into tradable securities.
The bonds and associated tawarruq mentioned here are local instruments provided by the CBK to banks operating within the Kuwaiti banking sector. The primary aim of these Kuwait Central Bank bonds and tawarruq issuance operations is to manage liquidity by absorbing excess funds from the market.
