Kuwait suffers from “imported inflation”
The Central Bank Governor, Sheikh Salem Abdul Aziz Al-Sabah, recently announced that the increase in inflation ratings in Kuwait is mostly due to external sources, or “imported inflation”, noting that domestic interest rates are appropriate at this stage.
Sheikh Salem added that the current levels of local interest rates are the lowest in history and are used by the Central Bank to motivate national economic activities to surpass the negative impacts of the financial crisis.
He also said that deregulation legislation brings Kuwait in line with the principles of economic freedom, liberalization of services and diversifies the structure of the banking and financing system to develop Kuwait into a financial and trading center.
He explained that the modifications to “Basel 3”, which the Central Bank of Kuwait is trying to apply, impose the presence of additional bank reserves as a precaution for the future, and possible exposure to unforeseen circumstances. Investment companies will be required to review their positions, asset structures and their purposes.
Sheikh Salem confirmed that the company that chooses to submit to the supervision of the financial markets isn’t obliged to apply the last supervisory standards or any standards or regulations issued by the Central Bank because, noting that this power is limited to companies under the Central Bank’s supervision.