Sunday 30, September 2018 by Kudakwashe

Kuwait keeps rates on hold after US Federal reserve hike

 

The decision followed the announcement of a 25 basis point interest rate hike by the US Federal Reserve.

Kuwait’s central bank decided to keep its key discount rate unchanged at three per cent, reported Reuters.

The decision gives Kuwait more room to diverge from US policy if it believes domestic economic conditions warrant that. Compared to its rich Gulf neighbours which peg their currencies to the US dollar and have little room for an independent monetary policy, Kuwait manages its dinar against an undisclosed basket of currencies in which the dollar plays a major role.

In a statement, Mohammad al-Hashel, the Governor of Central Bank of Kuwait, said that the bank would use other policy tools to manage the money market, such as issues of bonds and Islamic instruments, acceptance of term deposits from local banks and direct interventions.

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