2.27 AM Saturday, 9 December 2023
  • City Fajr Shuruq Duhr Asr Magrib Isha
  • Dubai 05:30 06:49 12:14 15:11 17:33 18:52
09 December 2023

Kuwait allows second-biggest dinar rise since peg drop

By Agencies


Kuwait on Sunday let its dinar rise the most against the dollar in almost eight months, taking its cumulative gain above 8 per cent for the first time since dropping its peg last May to the declining US currency.

The dinar, the currency of the only Gulf Arab oil producer to drop its peg, will trade 0.79 per cent higher around a mid-point of 0.26700 against the dollar, versus 0.26910 on Thursday, the central bank said.

That is the biggest jump since July 25 when the central bank allowed the dinar to rise 1.74 per cent, and brings its cumulative gain to 8.29 per cent.

The dollar hit a record low against the euro and fell below 99 yen on Friday, and shares dropped as an emergency funding plan to rescue Wall Street's fifth biggest broker Bear Stearns hammered global equity markets and boosted safe-haven flows to government bonds and inflation hedges like gold.

The Fed's attempt to ease credit market strains by offering to accept mortgage bonds as collateral had sparked the biggest daily gains for five years on the Dow Jones industrial average and Nasdaq on Tuesday, but nagging worries about the state of the US economy overcame that initial optimism.

Kuwait has declined to give the composition of the basket, saying only that the dollar was its biggest component.

The central bank said the dollar's decline on global markets was driving up inflation and making some imports more expensive. Kuwait pays for more than a third of its imports in euros. (Reuters)