Question

In: Economics

What is Kuwaits Monetary and Fiscal Policy?

What is Kuwaits Monetary and Fiscal Policy?

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Expert Solution

-->There are various policies as instruments to influence and monitor the economy of any country. These policies can be taken up by either governments ( i.e. fiscal policy ) or Central bank (i.e monetary policy). Fiscal policy and monetary policy can be either expansionary or contractionary. Authorities can adopt appropriate policies to maintain macroeconomic stability. Expansionary policies means increasing money supply through various tools such as lowering taxes, increasing government spending, lowering interest rates; and it is vice-versa in case of contractionary policies.

--> Monetary policy in the State of Kuwait is set and implemented by CBK in accordance with the Law No. 32 of the year 1968 concerning Currency, the Central Bank of Kuwait and the Organization of Banking Business. Monetary Policy's prime objective is to maintain monetary stability with the aim to mitigate the impacts of inflation. A related objective mandated by the Law is that monetary policy should be managed in such a manner as to enhance the social and economic progress and growth of national income of Kuwait.


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