Money supply (M1) was up 1.9 percent (134 million Kuwaiti dinars) in April while the broader measure of money (M2) contracted by -0.5 percent (-KD 140 million) following a strong seasonal jump in March, according to a report released by the National Bank of Kuwait (NBK) on Tuesday. There was an outflow of money from time deposits into shorter term accounts. Growth in outstanding credit slowed in April. Loans rose a mere KD two million following stronger gains of KD 400 million the previous two months. Yet with a three percent year-on-year (y-o-y) increase, credit growth showed some signs of improvement compared to 2011.
Personal facilities, excluding loans for the purchase of securities, continued to be a key driver of credit growth, rising a decent KD 56 million month-on-month in April.
It was a less significant increase than last month's growth of KD 86 million month-on-month. Other gainers included real estate (KD 26 million) and other business credit (KD 44 million). These sectors offset drops observed in credit extended to the trade (KD 31 million), industry (KD 16 million), and oil and gas (KD 19 million) sectors. Credit extended to non-bank financial institutions remained a drain on growth in credit, it fell by KD 48 million month-on-month in April. Credit to this sector has shrunk year-to-date by KD 210 million or 8.8 percent year to date.
Private sector deposits fell KD 117 million in April following a large increase the previous month. The drop came mostly from foreign currency account withdrawals. In local currency deposits, time deposits declined KD 241 million while sight deposits were up KD 157 million.
The average rates offered on private KD deposits remained unchanged across maturities in April averaging 0.80 percent, 1.04 percent, 1.30 percent and 1.54 percent, for the one, three, six and 12-month maturities, respectively. Bank reserves rose KD 104 million month-on-month, mainly due to increases in sight deposits (KD 86 million) with the Central Bank of Kuwait. Total bank assets dropped by KD 231 million driven largely by contractions in foreign assets (KD 190mn) and interbank placements (KD 130 million).
Kuwait inflation plunges to nine-year low
Kuwait's annual inflation rate fell to a modest 2.7 per cent in October - its lowest in nine years, despite robust consumer spending and some improvement in business sentiment, said a report.