Central Bank bolstering foundations of domestic economy
KUWAIT: Governor of the Central Bank of Kuwait Dr Mohammad Al-Hashel announced yesterday the average rate of the US dollar against the Kuwaiti dinar in the fiscal year 2018-2019 stood at 302.743 fils, rising by 0.2 percent compared to 2017. In a press release, the governor said the gross domestic product (GDP), on basis of constant rates, rose 1.2 percent last year against a decline estimated at 3.5 percent in 2017.
Hashel was speaking on the occasion of the CBK's issuance of the 47th annual report for the fiscal year 2018-2019 and the 47th economic report for 2018. Continuous follow-up on local economic, monetary and banking developments as well as monitoring interest rate trends on major global currencies kept the discount rate for the fiscal year 2018-2019 at the same level - 3 percent - since March 2018.
The close follow-up was in line with the CBK's efforts to bolster foundations of the domestic economy, in tandem with preserving attractiveness and competitiveness of the national currency as an incubator for domestic savings, Hashel added. Moreover, the Central Bank in the past year preserved relative stability of the Kuwaiti dinar, keeping it pegged to a balanced basket of currencies of states with substantial commercial bonds with Kuwait, he said.
This was visible in the developments that had taken place in the foreign exchange market, where the average exchange rate of the US dollar against the Kuwaiti dinar for the fiscal year 2018-2019 stood at approximately 302.743 fils for a dollar, in contrast with 302.052 fils per dollar in the previous fiscal year, a rise of the USD exchange rate estimated at 0.692 fils (0.2 percent).
With respect to monetary and banking developments, the CBK governor said money supply in the broad concept (M2) increased five percent at the end of the 2018-2019 fiscal year in comparison to the end of the previous fiscal year. Assets of the cash used from credit facilities offered by local banks to various domestic economic sectors climbed at the end of the fiscal year 2018-2019 by 5.2 percent. Deposits by residents (both citizens and expatriates) in local banks rose 2.4 percent at the end of the fiscal year. Aggregate budget for local banks grew by 5.6 percent.
Regarding the economic report for the year 2018, Hashel indicated that its first section sheds light on main trends of the Kuwaiti economy in terms of data and statistics about national, local accounts, the population and the labor force. Statistics showed growth in added value in the constant prices of the overall non-oil sectors by 1.1 percent in 2018, in contrast to 1.8 percent in the previous year. Meanwhile, the added value in the fixed prices in oil sectors climbed 1.3 percent against a downturn totaling 7.2 percent in the previous year.
The Kuwaiti dinar relatively steadied against major currencies in 2018. As a result of the changes of interest on main global currencies, the CBK only once increased the discount rate by 0.25 percent in March 2018, reaching three percent. Aggregate accumulate budget of the local banks grew by 4.9 percent at the end of 2018 compared to the 2017 level.
Meanwhile, the identical budget for local exchange dealers registered at the CBK rose 1.2 percent, while that of local investment companies registered at the Central Bank rose 11.1 percent. Achieved surplus in the commodity balance rose 58.6 percent due to the rise of oil exports, following noticeable increase of crude prices in international markets. Current account posted a surplus of KD 6.1 billion ($30 billion) in 2018, while balance of payments in the same year posted an overall surplus, valued at KD 1.1 billion ($3.6 billion). In conclusion, he indicated the last sections of the economic report shed light on developments at Boursa Kuwait (the stock market) last year. - KUNA