KUWAIT CITY, April 26: The Central Bank of Kuwait has initiated a comprehensive field inspection of exchange companies to scrutinize their mechanisms for setting foreign exchange rates and calculating commissions on international money transfers.​

Regulatory authorities have inquired about the methodologies employed by exchange firms to determine the exchange rates for the Kuwaiti dinar against major foreign currencies, including the frequency and real-time updates during customer transactions. Additionally, questions have been raised regarding whether commission rates and exchange rates are standardized across all company branches or vary by location. Further clarification is sought on whether pricing structures differ based on customer segments or transaction amounts.​

The Central Bank is also examining the financial penalties previously imposed by the Disciplinary Board of the Competition Protection Authority on approximately 16 exchange companies. These penalties, ranging from 1% to 5% of total revenues for fiscal years 2020 to 2022, were based on allegations of collusion to unify foreign exchange rates, violating Kuwait's competition laws. However, exchange companies successfully contested these fines in court, with rulings affirming that they did not engage in unlawful practices.​

Despite the judicial outcomes, the Central Bank is continuing its inquiry. Officials have requested all relevant correspondence between exchange companies and the Competition Protection Authority, as well as legal documents pertaining to the contested fines, to ensure that no informal agreements were made to fix, raise, or lower exchange rates.​

This regulatory action aligns with the Central Bank's broader efforts to maintain transparency and fairness in Kuwait's financial sector, particularly concerning the critical area of international money transfers. The Central Bank aims to ensure that exchange firms operate in compliance with legal standards, safeguarding both market competition and consumer interests.