Kuwait’s Foreign Assets And Adjusted Net Foreign Sufficient For 24.9 Years To Maintain The Exchange Rate Against Dollar

The “MUFG” group for investor services clarified that Kuwait’s foreign assets amounting to about $578 billion, and the adjusted net foreign assets of about 34.8 billion, are sufficient for 24.9 years to maintain the exchange rate of the dinar against the dollar, in light of the evaluation of funds according to the money supply in its narrow sense (M1).

Al-Rai quoting a report issued by the “MUFG” group for investor services, the UAE ranked first in the Gulf, as its foreign assets amounting to about $920 billion and its adjusted assets (140 billion) are enough for 41.5 years to maintain the current exchange rate of its currency against the dollar, while Saudi Arabia’s foreign reserves of about 702 billion, and its assets adjusted by about 381.8 billion on the sustainability of the current exchange rate of its currency in dollars is good enough for 8.7 years.

MUFG indicated that Bahrain’s foreign reserves of $13.1 billion and adjusted assets of about 9.5 billion maintain its currency exchange rate against the dollar between 2.3 years, while Oman came in the least in the Gulf in terms of assets that must be available to maintain its currency peg rate, as its current foreign assets ( $18.3 billion) and equivalent funds (14.1 billion) are sufficient to maintain the current exchange rate against the dollar for only 8 months, warning that the Sultanate is exposed and exposed in light of the assessment of the money supply in its narrow sense.

The group stated that the total foreign reserves of all Gulf countries amount to 2.569 trillion dollars, and their adjusted assets are about 620 billion, pointing out that these foreign exchange savings are enough for about 18.3 years to maintain the link between their currencies and the dollar.

The group indicated that the Gulf countries enjoy abundant wealth thanks to the size of the assets of their sovereign funds, and that they will continue to finance the national vision programs, pointing out that the Gulf countries enjoy huge oil reserves that will last for decades, noting that Kuwait’s oil reserves was about 101.5 billion barrels by the end of 2021, which is sufficient for it for about 103.2 years, it is ranked second in the Gulf after Saudi Arabia, which has oil reserves of about 297.5 billion barrels at the end of last year, while the UAE comes with oil reserves of 97.8 billion barrels, then Qatar with 25.2 billion barrels, and then Oman with 5.4 billion barrels and finally Bahrain with 0.2 billion barrels.

MUFG stated that the Gulf countries are following the path of the Federal Reserve in interest rates, so that they are still relatively low, pointing out that the Gulf banks have a strong tendency towards higher interest rates, which will certainly support their profits.

The sources added that despite the announcement of unprecedented monetary, financial and banking measures by the Gulf countries over the course of the pandemic, Kuwait granted exemptions from multiple government fees, and other measures amounting to about 1.6 billion dollars, equivalent to 1.5 percent of GDP, while easing liquidity coverage curbed the rate of organizational liquidity.

 

SOURCE  :   TIMES KUWAIT

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