Kuwait urges banks to slow down lending - Emirates24|7

Kuwait urges banks to slow down lending


Kuwait's central bank governor met with local banks last month to discuss ways to slow down the pace of lending growth in world's seventh-largest oil exporter, daily Al Qabas reported on Monday.

The Kuwaiti central bank tightened curbs on consumer lending beginning March 30 to try to rein in inflation, which hit a record 7.54 per cent in December. Kuwait is the only Gulf Arab oil producer that does not peg its currency to the dollar.

"There is a hidden problem that could arise in the near future and banks are not cooperating appropriately with the instructions of the central bank," Sheikh Salem Abdul-Aziz Al Sabah was quoted as saying by the Arabic-language newspaper.

Money supply in Kuwait grew 26 per cent in February, just below a 14-year peak the month earlier.

Sheikh Salem urged banks to reduce the volume of credit facilities they extend to customers, Al Qabas said, without giving details.

Central bank officials could not immediately reached for comment when Reuters called.

Under the new rules, borrowers arranging fresh loans will be limited to monthly interest and repayment instalments equivalent to no more than 40 per cent of their salaries, compared with 50 per cent before. (Reuters)