Tuesday 28 December 2010

Kuwait rejects Islamic banks' liquidity request

Kuwait's central bank denied a request by Islamic lenders to grant them exceptions from liquidity ratio requirements and allow for the withdrawal of excess liquidity, a newspaper reported on Tuesday.

Kuwaiti Arabic daily Al-Rai said this was the second time the country's central bank rejected such a proposal - a move some banks say put them at a disadvantage to conventional banks.

The central bank intervenes in the money market to withdraw excess liquidity at banks through bonds issued by and received from the banks on demand.

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