Kuwaiti Central Bank Cuts Repo Rates By Quarter Point

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Kuwait’s central bank cut its one- week and one-month repurchase rates by a quarter percentage point, a day after reducing its benchmark interest rate.

The one-week rate was lowered to 1.50 percent and the one- month to 2 percent, according to data posted on the central bank Web site today. The overnight repo rate remained unchanged. The one-week and one-month rates were last cut in July 2009.

The central bank yesterday reduced its discount rate by half a percentage point to 2.5 percent. That cut, the sixth since October 2008, aimed “to provide an atmosphere conducive to the growth of non-oil sectors in the local economy by reducing the cost of lending,” Central Bank Governor Sheikh Salem Abdul Aziz al-Sabah said, according to the state-run KUNA news agency. The last reduction in that rate was on May 13.

Kuwait’s economy is estimated to have contracted 1.5 percent last year, compared with a 6.3 percent expansion in 2008, according to the International Monetary Fund. Oil prices peaked at more than $147 a barrel in July 2008 and fell to a low of about $34 a barrel in December of the same year. Oil now trades at about $72 a barrel.END