Money-supply growth eases

Annual Kuwaiti money-supply growth eased for a second month to 15.29 per cent in July, the slowest annual growth rate in 20 months, as funds in savings and time deposits rose more slowly.

M3, the broadest measure of money circulating in the economy, hit 20.74 billion dinars (Dh284.5bn) on July 31 compared with 17.99bn dinars a year earlier, the central bank said in a monthly report yesterday.

Money supply growth is an indicator of future inflation.

The rise in July money supply was the slowest since November 2006.

Inflation in Kuwait was 11.1 per cent in May, just off a record level a month earlier.

July money supply grew more slowly after quasi-money – which includes savings and time deposits in dinars, as well as foreign currency deposits – climbed 16.1 per cent, down from 18.7 per cent in June. Narrow money, or M1, rose 12.7 per cent to 4.62 billion dinars in July, down from growth of 16 per cent in June and 28 per cent May, the data showed.

Kuwait severed its dinar's peg to the US dollar in May 2007.