Kuwait step eases dinar speculation

Currency traders in Dubai and Kuwait said this was done to initially discourage investors anticipating an appreciation of the dinar.

 

 

“The central bank is happy,” Steve Brice, a Middle East economist for the Standard Chartered Bank, said.

 

“The move suggests that it has squeezed out speculators from the market.”

 

The central bank has been trying to deter bets on dinar appreciation for much of this year, cutting key interest rates in the run-up to a revaluation on May 20.

 

As investor piled into dinar deposits, the central bank said on May 27 it had stopped selling the certificates it used to set the one-month intervention rate.

 

The certificates are a main tool through which the central bank takes in short-term dinar deposits from Kuwaiti banks.