Kuwait's Noor calls for 'dramatic' rate cut
Kuwait City, January 5, 2009
Noor Financial Investment Co has urged Kuwait's central bank to "dramatically" cut the discount rate to help the financial sector cope with the global crisis.
The central bank slashed its discount rate by 50 basis points to 3.75 percent last month, the last in a series of moves that has reduced the benchmark rate by 200 basis points since October.
"The crisis is deep...We believe the current phase requires a dramatic cut of the (discount) interest rate to get ideal and quick solutions," Naser Al-Marri, Noor's managing director told Al-Watan newspaper.
Al-Marri could not immediately be reached for comment.
On Sunday, Central Bank Governor Sheikh Salem Abdul-Aziz Al-Sabah declined to say whether Kuwait might again cut the discount rate which banks use to set lending rates.
Some Kuwaiti investment firms are facing difficulties due to their exposure to international markets which have been pummeled by the credit crunch.
Global Investment House, the country's biggest investment bank, and major Islamic investment firm Investment Dar, both surprised markets last month with news they needed loans worth up to $1 billion each.
Al-Marri also called on the government to spend 10 billion dinars ($36.15 billion) to soften the impact of the credit crunch by buying into the local stock market and boosting deposits at banks so they could lend more.
Last month, Kuwait launched a state fund aimed at stabilising the stock market. The fund, administered by the Kuwait Investment Authority, would invest at least 1.5 billion dinars in the market, the finance minister has said. - Reuters