The Kuwaiti cabinet has approved a draft decision paving the way for the country, a member of the OPEC, to issue international debt for the first time in eight years. The approval approved during the council meeting Thursday, when a law related to ‘financing and liquidity’ approved, according to an official statement, with reference to the Public Religion Act, without disclosing additional details. The decision, submitted by Finance Minister Noura Al -Falas, was referred to the Emir of Kuwait, Sheikh Misaal Al -Ahmad Al -Sabah, for approval, which is an essential measure to take laws in the country. The original draft law set the loan ceiling at $ 20 billion ($ 65 billion) over 50 years, according to informed sources that spoke to ‘Bloomberg’ in January. They also indicated that the maximum debt in the final formula could rise, with previous proposals to increase it to 30 billion dinars. Kuwait belongs to the bond market, Badr al -Saif, assistant -professor at the Kuwait University and the colleague participating in ‘Cathham House’, said: ‘To come late is better than never comes. Kuwait’s abilities are genuine and enormous, but in the absence of a set of daring and urgent measures, this ability will soon fade. ” Political differences have for years hampered the commencement of the Government Debt Act, which made it impossible for successive governments that borrow, and forced them to rely on the public reserve fund or the public treasury. Kuwait is expected to be used in international markets, mainly to finance major development projects, and to contribute to the filling of the financial deficit in Kuwait, if necessary. Kuwait is an important ally of the United States in the Middle East, as it is one of the largest oil exporters in the world, and has a sovereign fund that is estimated about a trillion dollar. It was the last debt issue in March 2017, when it was offered $ 8 billion for five and ten years, days before the expiry of the previous Public Debt Act. The longest Kuwaiti bonds, owed in 2027, traded with a yield of about 4.75%, which is almost in line with oil -rich government bonds such as Abu Dhabi, Qatar and Saudi Arabia, and less than 200 basis points than the average sovereign debt returns for emerging markets. Kuwait Bonds .. A strong question, Fadi Juna, said the director of the fixed revenue portfolio in the ‘capital numbers’ in Dubai: ‘I expect a strong demand for Kuwait’s return to the international bond market to an eight -year absence.’ Kuwait has a low level of external debt and has an “A1” credit rating of the agency “Standard & Poor”, which is equivalent to the classification of China and Japan. Last May, the Emir of Kuwait issued a decision to dissolve the National Assembly and suspend its work for a four -year period, which gives the government, chaired by members of the Al -Sabah family, the authority to accept great laws. Kuwait is the only country in the Gulf Cooperation Council that has an elected parliament, which created a more pluralistic political environment, but at the same time imposes challenges for the legislative process. Political crises have led to the hindrance of development efforts for years, which led to a decline in foreign investment, the failure of financial reforms and the slowdown of plans to diversify the economy that is dependent on oil. With the approval of the new law, Kuwait, according to informed sources, will be able to issue both traditional effects and Islamic effects, which confirmed that the country will only use mortgage markets if necessary.
Kuwait gives the green light to sell the first international effects in 8 years
