Kuwait central bank to issue further tranche of T-bills

BOND ISSUE: Strong demand from risk-averse banks reluctant to lend or invest. (Getty Images)

Kuwait's central bank said on Sunday it would issue 92 million dinars ($317.2 million) of one-year treasury bonds on March 25, carrying a coupon of 2.25 percent, the third issue this month meeting strong demand.

Central bank data showed the bond issue, which matures March 24, 2010, received 749 million dinars of bids.

The last issue, on March 18 for 200 million dinars worth of treasury bonds with the same coupon, received bids worth six times that amount as banks continued to look for ways to soak up excess cash.

The move was seen as a way of creating investment opportunities for risk-averse banks that are reluctant to lend or invest amid global financial turmoil, analysts said.

Kuwaiti banks have become prudent after the state was forced to step in and rescue one of the country's biggest banks, Gulf Bank , last year, and as they await the approval of a $5 billion state rescue package.

Across the Gulf region, banks have been writing down investments and taking provisions for bad loans as they face a financial crisis that brought to an end a regional economic boom.

Like other states in the world's top oil-exporting region, Kuwait has introduced a slew of policy responses since the global credit crisis deepened in late September to help shore up banks and restore investor confidence.  (Reuters)

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