Rates scrapped by Kuwait cbank to increase growth
The media reports suggest that the benchmark discount rate of the Central Bank of Kuwait was cut by 50 basis points to 2.5% on Sunday. This has come as the first reduction in nine months.
Central bank governor Sheikh Salem Abdulaziz al-Sabah expressed, "The reduction--the sixth since October 2008--will provide the necessary environment conducive to boosting growth in non-oil sectors of national economy by reducing the cost of lending after indications that inflationary pressures have declined."
Sheikh Salem told that the recent available data displays that in the month of April, the inflation decreased for the seventh straight month to 5.2% after registering a record average of 10.6% in 2008.
A scrap in interest rates will most probably promote Kuwaiti investment companies to look for fresh loans to refinance their debt, which were hit hard by the global economic downturn.
The step also comes a week after parliament in the Gulf state accepted a four-year development plan that stipulates spending of more than $100 billion on mega projects.
