The decline in the exchange rate of the Kuwaiti dinar granted the state’s treasury an additional dinar for every barrel of oil sold by Kuwait at the current price ($42.5 per barrel), which adds up to KWD2.9 million a day.
According to the current exchange rate, the price of a barrel of Kuwaiti crude amounts to KWD12.9, while it would be equivalent to KWD11.9 if the dinar exchange rate today is what it was 18 months ago.
Hence this rate can provide the treasury with nearly KWD90m per month and more than KWD1 billion over the year, reports Kuwait-based Al Rai.
On Thursday, the Kuwaiti dinar exchange rate reached its lowest level ever at 303.25 to the dollar.
Regardless of the current fluctuations of the global exchange rates, some observers believe that reducing the rate of the dinar is a thoughtful approach in line with the needs of the fiscal and monetary policies, the reality of hard currency flows and the decline in Kuwait’s oil sales revenues by more than half since the summer of 2014 due to the sharp decline in oil prices.
(KWD1 = AED12.10, at the time of publishing)