Kuwait Raises Rate to Six Percent

KUWAIT CITY, 3 November 2005 — The Central Bank of Kuwait yesterday raised the discount rate by 0.25 basis points to six percent, the fifth increase this year following a similar step by the US Federal Reserve. Governor Salem Abdul Aziz Al-Sabah said the measure was taken as part of the bank’s efforts to strengthen monetary stability and curb inflationary pressures. He also said the raise aimed at preserving the local dinar’s competitiveness against international currencies, especially the dollar. Kuwait’s currency is pegged to the dollar as part of plans by the six-nation Gulf Cooperation Council to establish a monetary union and a single currency by 2010.