Central Bank Calls to Avoid Kuwait Downgrade

KUWAIT: Kuwait's Central Bank urged better political climate and measures to weather a global financial crisis after warnings by some agencies to downgrade the country's sovereign rating, the state news agency reported. Moody's Investors Service said in March it may cut Kuwait's sovereign rating due to a protracted political crisis which is threatening the country's ability to cope with the financial downturn.

Such event as a drop in rating alerts us to the urgent need to sustain a political atmosphere that best prepares us to counter the economic challenges," Sheikh Salem Abdul-Aziz Al-Sabah said, according to KUNA. "We ourselves have to reach a national consensus on economic issues... and take steps and measures to overcome the economic slump.

Moody's said it had placed Kuwait's Aa2 rating on review for possible downgrade for the first time since it started rating the country in 1996, citing the political turmoil hitting the OPEC member despite its enormous oil wealth. "Sovereign credit rating and credit rating of Kuwaiti banking and financial institutions by international rating agencies are key indicators ... on the state's status and position within the world market," Sheikh Salem said adding that Kuwait still has "all that is needed to survi
ve the current challenging times.

In March, HH the Amir dissolved parliament, setting elections on May 16 after the government quit following attempts by several deputies to question the prime minister. The Cabinet had quit for the same reason in November and HH the Amir Sheikh Sabah Al-Ahmad Al-Sabah dissolved parliament in March 2008 to end a similar row but to no avail. The long-running standoff between the Cabinet and lawmakers has repeatedly delayed economic reforms and government's plans to attract more foreign investments.

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