WINDOW FOR BANK AID IN KUWAIT REMAINS SHUT
The Kuwait Central Bank kept its window
for funds to the domestic interbank deposit market shut as
banks returned from a four day holiday, dealers said.
    The move drove short-term interest rates sharply higher,
with overnight and tomorrow-next funds more than doubling from
last Wednesday and hitting 20 pct.
    There were few offers in a tight market and traders
scrambled for any available funds. One-month to one-year
deposits were indicated one point higher at eight, seven pct
but there was little activity at the longer end of the market.
    Bankers see the suspension of central bank aid as a
deliberate move to drive up Kuwaiti dinar interest rates and
stem a flow of funds out of the country, where market
nervousness is increasing over the growing tension in the Gulf.
    The central bank's move has been combined with a steady cut
in the dinar exchange rate.
    Today's rate was reduced to 0.27939/73 to the dollar from
0.27758/92 on Wednesday before the four day bank holiday that
celebrated the end of the fasting month of Ramadan.
 REUTER
