The Central Bank of Kuwait issued a circular to banks setting out supervisory instructions and macroprudential measures that adjust regulatory liquidity requirements and capital adequacy settings to increase the domestic banking sector’s flexibility as it monitors current geopolitical developments. The package includes lowering liquidity standards applied to banks, including the liquidity coverage ratio, the net stable funding ratio and the regulatory liquidity ratio. It also raises maximum limits for cumulative gaps in the liquidity system, increases the maximum limit available for granting financing, and releases part of the prudential capital buffer within the capital base. Alongside the measures, the Central Bank of Kuwait reiterated that Kuwaiti banks’ financial soundness indicators, including liquidity and capital adequacy, exceed global averages and supervisory requirements by comfortable margins. The central bank stated it will continue closely monitoring economic indicators and geopolitical developments and will act as needed to support the sustainability of domestic banking activity.
Central Bank of Kuwait 2026-03-26
Central Bank of Kuwait eases banks’ liquidity standards and releases part of prudential capital buffer via supervisory circular
The Central Bank of Kuwait issued a circular adjusting liquidity and capital adequacy requirements to enhance the banking sector's flexibility amid geopolitical developments. Measures include lowering liquidity standards, raising limits for liquidity gaps and financing, and releasing part of the prudential capital buffer. The bank affirmed that Kuwaiti banks' financial soundness indicators exceed global averages and will continue monitoring economic and geopolitical conditions.