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22 May 2024

Kuwait lets dinar fall for second day

By Agencies


Kuwait let the dinar fall against the dollar for a second day after the US currency recorded its largest one-day rise in nine years versus the yen on Tuesday and rallied against the euro.

The dinar, the currency of the only Gulf Arab oil producer that does not peg to the dollar, will trade 0.04 percent lower on Wednesday around a mid-point of 0.26640, compared with 0.26630 the day before, central bank data showed.

That lowers its cumulative gain against the dollar since dropping its peg on May 19 to 8.54 per cent from 8.7 per cent on Monday.

Gulf Arab states are under pressure to revalue their currencies as the dollar is down on concern about the US economy.

Still, on Wednesday, the dollar slipped against the yen in seesaw trading but kept its distance from a 13-year trough hit earlier this week after the Federal Reserve delivered a smaller-than-expected interest rate cut of 0.75 of a percentage point.

The dollar plunged on Monday after the Fed took the emergency step of cutting its discount rate the day before and opened up discount window lending to large investment banks, a tool not used since the Great Depression.

The steps, which accompanied JPMorgan Chase Co's decision to buy stricken rival Bear Stearns at a rock-bottom price of $2 a share, was seen as highlighting the depths of the damage caused by the tumult in credit markets and sparked a dollar sell-off. (Reuters)