Mubasher: The Central Bank of Kuwait (CBK) on Thursday announced a stimulus package to help vital economic sectors, projects of added value, and small and medium-sized enterprises (SMEs) cushion the impact of the coronavirus outbreak.
The new directives will encourage banks to lend more and help sectors affected by the pandemic overcome the current circumstances, according to a press release on Thursday.
The announcement was recently made by the CBK governor, Mohammed Al Hashel.
Al Hashel outlined the Kuwaiti banking sector’s solid position as reflected in the country’s financial soundness indicators (FSIs) that exceed international levels.
The central bank has reduced the liquidity requirements for banks, including liquidity coverage ratio, net stable funding ratio, and regulatory liquidity ratio.
In addition, it raised the maximum cumulative funding gap and lending limits.
Additionally, it eased the risk weighting for SMEs to 25% from 75%, reduced capital adequacy requirements by 2.5%, and increased the maximum lending limit to 100% from 90%.
The amendments also included increasing the maximum financing for residential properties to the property value or development cost.
The CBK concluded that it will monitor banks to ensure the package meets its intended purpose and will not hesitate to take further measures to meet the higher interest of the national economy.