Kuwait’s Central Bank releases $776 mn worth of bonds

For a 3-month period with a return rate of 4.375 percent
Kuwait’s Central Bank releases $776 mn worth of bonds
Kuwait Central Bank (Image Credit: CBK)

According to Kuwait’s Al-Seyassah newspaper, the Central Bank of Kuwait (CBK) has allocated KWD 240 million (approximately $776.5 million) for a 3-month period to issue bonds and tawarruq with a return rate of 4.375 percent.

Read more: Kuwait issues final Central Bank bonds, tawarruq worth $660mn

Bonds serve as a means for governments to borrow funds, with the obligation to repay the principal amount along with interest to the bondholders upon maturity. On the other hand, securitization (tawarruq) is a process enabling businesses to convert a collection of funds or debts into tradable securities.

Bonds and related tawarruq refer to local bonds offered by the Central Bank to banks operating in the Kuwaiti banking sector. These bonds aim to regulate liquidity by withdrawing excess liquidity from the market.

In June, Kuwait’s Central Bank allocated 240 million dinars (roughly $781.38 million) for a 3-month period to issue bonds and securities, yielding a return rate of 4.250 percent.

The second issuance amounted to KWD 230 million (approximately $759 million), spanning a 6-month period and featuring a return rate of 4.375 percent.

On May 29th, CBK issued bonds and tawarruq amounting to 240 million dinars (approximately $792 million).

Security enhancement

In a separate development, CBK invited banks on September 19th to strengthen their security systems, allowing for the issuance of secure tokens. These tokens would facilitate secure banking transactions through mobile applications, ensuring that operations are limited to authorized devices only. Moreover, the implementation of these systems would prevent the use of the bank’s mobile app if any device control application is detected.

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