KUWAIT CITY, Dec 19: The Central Bank of Kuwait (CBK) has announced that its current assessment of local economic and financial data reflects the soundness and robustness of the monetary and financial stability in the State of Kuwait.

In a statement issued Wednesday evening, the CBK emphasized that this evaluation is part of its continuous monitoring of global economic trends and their implications for the local economy. The bank highlighted the necessity of tailoring policy responses to address these developments according to the specific requirements and circumstances of each economy.

The statement noted that, globally, inflationary pressures have eased to varying degrees due to restrictive monetary policies implemented by many advanced and emerging economies since March 2022. These measures have led some major central banks to begin shifting their monetary policy cycles, with gradual reductions in interest rates anticipated in 2024.

Despite expectations of largely stable economic growth rates in 2025, the CBK cautioned that growth prospects remain uncertain, citing risks such as ongoing geopolitical tensions and the potential for renewed supply chain disruptions.

Regarding monetary policy in Kuwait, the CBK has adopted a gradual and balanced approach to adjusting the discount rate in alignment with local economic conditions. This strategy aims to maintain macroeconomic stability and support sustainable growth. On September 19, the CBK reduced the discount rate by 25 basis points to 4 percent, reflecting its responsiveness to global and local economic developments.

At the macroeconomic level, data indicate a slowdown in inflation, with the rate decreasing from approximately 4.71 percent in April 2022 to about 2.44 percent in October 2024. The average inflation rate for the period from January to October 2024 was around 3 percent, compared to 3.64 percent in 2023. Additionally, the exchange rate of the Kuwaiti dinar has remained relatively stable against major currencies.

On the monetary and banking front, residents' deposits in the banking system grew by approximately 4.2 percent as of October 2024 compared to October 2023. Private sector deposits in Kuwaiti dinars accounted for 95.1 percent of total private sector deposits at the end of October 2024.

Credit facilities for residents also recorded a growth of about 3.2 percent as of October 2024 compared to the same period in 2023, providing supportive momentum for economic growth across various sectors of the local economy.

The CBK stressed that its decisions are based on careful analysis of all available data and continuous monitoring of global and local economic and monetary developments. The bank reaffirmed its readiness to take necessary measures and utilize available monetary policy tools, considering the structural characteristics of Kuwait's national economy.

In conclusion, the CBK reiterated its commitment to a gradual and balanced approach to ensure the preservation of financial and monetary stability, the competitiveness of the national currency, and its attractiveness as a reliable and profitable savings instrument. This approach aims to enhance sustainable economic growth in the State of Kuwait.