The Kuwait Central Bank (CBK) has announced the issuance of bonds and related tawarruq with a total value of KD240 million ($782.8 million).
In a statement, CBK explained that the issuance period is three months, with a return rate of 4.375 percent.
Recurring bond and tawarruq issuances
In April 2024, the Central Bank of Kuwait (CBK) previously announced the issuance of bonds and tawarruq with a total value of KD240 million. According to the Kuwait News Agency (KUNA), CBK specified that this issuance would remain valid for a period of three months and yield a rate of return of 4.375 percent.
In October 2023, CBK allocated KD240 million for a three-month duration to facilitate the issuance of bonds and tawarruq. The allocated funds offered a return rate of 4.375 percent.
In June 2023, CBK allocated KD240 million for a three-month period to issue bonds and securities with a return rate of 4.250 percent. Additionally, a second issuance was made for an amount of KD230 million over a six-month period, featuring a return rate of 4.375 percent.
Moreover, in May 2023, CBK issued bonds and tawarruq totaling KD240 million.
Read more: Kuwait issues final Central Bank bonds, tawarruq worth $660mn
What’s the purpose of bond and tawarruq issuances?
Bonds are instruments used by governments to borrow funds, with the commitment to repay the principal amount plus interest to the bondholders upon maturity. In addition, tawarruq, on the other hand, is a process that allows businesses to convert funds or debts into tradable securities.
The bonds and related tawarruq mentioned here pertain to local bonds offered by the CBK to banks operating within the Kuwaiti banking sector. Furthermore, the purpose of these bonds is to regulate liquidity by withdrawing excess funds from the market.
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