March 21, 2018 / 7:00 PM / a year ago

UPDATE 1-Kuwait central bank raises discount rate 25 bops

(recasts with central bank statement, context)

DUBAI, March 21 (Reuters) - Kuwait’s central bank said on Wednesday it was raising its discount rate by 25 basis points to 3.0 percent in order to support its dinar currency, after the U.S. Federal Reserve’s decision to hike rates by that margin.

It was Kuwait’s first interest rate hike since March last year. The central bank generally shadows U.S. monetary policy, but citing a need to support economic growth, it refrained from raising its own policy rate after the Fed tightened policy last June and December.

On Wednesday, central bank governor Mohammad al-Hashel said in a statement that exchange rates featured in the board of directors’ decision to lift the discount rate this time.

“The rise in U.S. interest rates highlighted the need to further enhance the competitiveness and attractiveness of the national currency as a vessel for local savings,” he said.

He added that the central bank also acted to improve the alignment between interest rates on public debt and rates on commercial loans. (Reporting by Andrew Torchia Editing by Raissa Kasolowsky)

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