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Kuwait banks 'still see lending risks'

Kuwait, July 19, 2011

Kuwaiti banks still see lending risks, but their growth path is 'comfortable' without surprises, the country's central bank governor said in a television interview with CNBC Arabia on Tuesday.

The central bank is in talks with the Capital Markets Authority (CMA) to reach an agreement on regulating investment firms, Sheikh Salem Abdul-Aziz Al-Sabah said.

'We are in negotiations with the CMA regarding (our roles), and we hope to reach an agreement to assign roles and responsibilities in order to change our scheme in regulating investment firms,' he said.

He also said Kuwait needs to increase government spending and support the private sector to overcome imbalances in its economy.

The country's 'unilateral' dependence on oil and the government's control of all sectors are causing the main imbalances in the economy, Sheikh Salem said.

'There are three structural imbalances in the Kuwaiti economy ... (including) the government's dominance of economic activity ... the private sector investor needs to be given a chance and that will reflect positively on the state's budget,' he said.   

Oil revenues in Kuwait, the world's fourth-largest oil exporter, account for more than 90 percent of state income. A fall in oil prices is one of the risks facing the country's economy in 2012, Kuwait's finance ministry has said in a report on its website.

Last month, Kuwait's parliament approved a 19.4 billion dinar ($71 billion) state budget for the 2011/12 fiscal year, the biggest since at least 2003. -Reuters




Tags: banking | Kuwait | lending | Risks |

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