(Adds details, background)
KUWAIT CITY, Sept 22 The Central Bank of Kuwait
is ready to pump liquidity into the local banking system if
necessary, several Kuwaiti papers quoted the central bank as
saying following a recent decline of the Gulf Arab state's
bourse due to the global credit crisis.
"The board ... affirmed that it will not hesitate to
undertake the appropriate measures in this regard, including
the readiness of the central bank to provide any local banking
institutions with the necessary liquidity if there is a need
for that," the daily al-Qabas, among others, quoted the central
bank statement as saying in its Tuesday edition.
Newspapers reported on Monday that local banks were asking
the central bank to provide them with more liquidity after the
Kuwait bourse fell sharply last week. Apart from the global
credit crisis, the government has blamed a flurry of capital
increases sucking up liquidity from the stock market for the
Interbank rates in Kuwait have almost doubled since the
central bank in August withdrew a facility guaranteeing the
availability of dinars at a fixed rate on the interbank
The central bank is reviewing all elements of its monetary
policies, the daily al-Alam al-Yawm quoted the central bank as
saying, adding that it would continue efforts to stop rising
Inflation in Kuwait was 11.1 percent in May, the latest
published data, just off a record level a month earlier.
State news agency KUNA said on Monday that credit
facilities by local banks rose to 22.6 billion billion dinars
at the end of August, up from 20.1 billion billion dinars at
the end of December, quoting a central bank statement.
The central bank could not be reached for comment.
The United Arab Emirates Central Bank on Monday launched
plans for a 50 billion dirham ($13.6 billion) emergency
facility to help banks caught in a liquidity squeeze stemming
from the global financial crisis.
The central bank of the world's fifth-largest oil exporter
said it would set up the facility due to bottlenecks in
international money markets, in moves similar to those made in
recent weeks by the U.S. Federal Reserve and the European
(Reporting by Ulf Laessing, Kuwait newsroom, +965 246 03
50; Editing by Dan Grebler)