Inflation rates in Kuwait are largely related to external factors, the Governor of the Central Bank of Kuwait Sheikh Salem Abdul Aziz Al-Sabah said in remarks published on Sunday.
Current levels of the interest rate are the lowest on the domestic record, and that falls within the policy of the CBK for motivating the national economy and trying to safeguard it from impact of the global financial crisis, said Sheikh Salem in an interview with the Kuwaiti Arabic-language daily newspaper, "Al-Rai." Shedding light on the CBK efforts to shore up the national economy, the governor affirmed that lifting the 2004 ban on foreign banks was in line with the principle of economic freedom, liberalizing services and diversifying the banking and financial systems as part of the strategy to transform Kuwait into a financial-commercial hub. He added that licenses were given to three branches of foreign banks and seven branches of Gulf banks, and indicated that according to the legislative amendment, a foreign bank was allowed to open a single branch in the country.
Moreover, the governor hinted at the desire to adopt the Basel amendments, according to which banks should secure sufficient financial reserve resources, by the end of 2011, to cope with further financial meltdowns or major crises in the economic and financial sectors.
On directives for the investment companies to review their conditions and roles, Sheikh Salem indicated these companies are not compelled to choose to be under supervision or the CBK or the finance market authority, indicating that these firms could take such a decision in their general assemblies.
Companies that choose to be under the umbrella of the financial market authority will not be obliged to be subject to the CBK.