Starting today, Thursday, the Central Bank of Kuwait (CBK) decided to raise the discount rate by a quarter of a percentage point (25 basis points) to 2.75 percent.
This is the second increase in discount rates in several weeks. CBK raised the discount rate by a quarter of a percentage point to 2.5 percent on July 27, following the Federal Reserve’s decision to raise key interest rates by three-quarters of a percentage point.
The bank’s governor, Basil Ahmed Al-Haroun, made the decision “in light of recent developments in local and global economic conditions and geopolitical developments that impacted global inflation rates and influenced, in turn, the consumer price index in the country,” according to a statement issued by the bank.
Al-Haroun stated that CBK would continue to monitor economic and monetary developments in local and international markets in order to take any additional measures necessary to ensure the country’s monetary and financial stability.
All Gulf states peg their currencies to the US dollar, except for Kuwait, which pegs the dinar to a basket of currencies that includes the dollar.