Kuwaiti Central Bank key rate to 2 percent

Kuwaiti Central Bank key rate to 2 percent

KUWAIT CITY- Agence France-Presse
Kuwaiti Central Bank key rate to 2 percent

Kuwaiti Emir Sheikh Sabah al-Ahmad al-Sabah gestures in the National Assembly hall in this file photo. Kuwait cut its key rate for the first time in 32 months. REUTERS photo

The Central Bank of Kuwait announced on Oct. 2 it has cut its benchmark discount rate by 50 basis points to 2 percent, its first reduction in 32 months.

Governor Mohammad al-Hashel said the reduction -- the seventh since October 2008 -- was taken to make borrowing cheaper, the official KUNA news agency reported.

The cut, the first since February 2010, was effective from yesterday. Under central bank regulations, interest rates on loans cannot exceed three percent above the discount rate.

Hashel said the measure was aimed at boosting growth in the non-oil sector and part of efforts to strengthen confidence in the national economy and accelerate growth.

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Many Kuwaiti companies, especially investment firms, are still reeling from the impact of the global financial crisis and the oil-rich Gulf state’s stock market is 60 percent lower than its level on Aug. 31, 2008.