Alamy via Reuters
New government legislation
Debt issuance in multiple currencies
Previous law expired in 2017
Kuwait can now borrow money from international markets after an eight-year hiatus.
The government has issued a new law that sets the public debt ceiling at KD30 billion ($97.4 billion) and allows the issuance of financial instruments with maturities extending up to 50 years, the state-run Kuna news agency reported.
The law will bolster financial stability and push forward economic development in line with the Vision 2035 programme, it said.
The previous financing and liquidity law expired in 2017.
Faisal Al-Muzaini, director of public debt, finance ministry, said the law will allow debt issuance in multiple currencies and allow the managing of public debt and liquidity.
Kuwait economy at a glance
It will also help improve Kuwait’s sovereign rating, preserve sovereign liquidity reserves and stimulate the economy, he said.
“For investors, it indicates that reforms are finally progressing,” Monica Malik, chief economist at Abu Dhabi Commercial Bank told Reuters.
Earlier this month, Fitch Ratings said Kuwait’s approval of a long-delayed draft financing and liquidity law will improve fiscal financing flexibility, and remove a source of credit risk.
However, the rating agency said that the government will be able to meet its financing needs even without a liquidity law, given the substantial assets at its disposal.
Kuwait also endorsed its budget for the next fiscal year 2025-26 this month with a higher deficit because of lower expected oil income.
The Arabic language daily Al-Anba said non-oil revenue is expected to increase by almost 9 percent to about KD2.9 billion from nearly KD2.68 during 2024-25.
