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Kuwait denies bailout package

By Reuters

Kuwait finance minister denied newspapers reports yesterday that the government is considering to set up a multi-billion dinar bailout fund to help troubled firms in light of the global financial crisis.

Several newspapers said earlier the cabinet discussed on Monday a new package of measures to boost the economy and agreed to set up a KWD5 billion (Dh64bn or $17bn) fund to buy assets from firms. "No, this is not correct," Finance Minister Mustapha Al Shamali told reporters when asked about the reports. Shamali added that the government was discussing a central bank-devised rescue plan, which is expected to be referred to parliament for approval.

In November, Central Bank Governor Sheikh Salem Abdul-Aziz Al Sabah said the government planned to set up a fund to buy assets at a discount from investment firms and issue them promissory notes enabling them to borrow from banks.

No further details have been made public since but executives and a government source told Reuters last week Kuwait planned to unveil new measures to shore up confidence in the economy, which may include a plan to help investment firms hit by the global crisis repay their debt.