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Kuwait has issued a new tranche of bonds for local banks valued at KWD150 million ($495 million), following last week’s issuance for a similar amount.
The Central Bank of Kuwait (CBK), acting on behalf of the finance ministry, issued the three-year treasury bonds and Tawarruq (shariah-compliant) bonds on Wednesday at a rate of 3.625%.
On February 4, the central bank issued a similar-sized tranche at the same yield, marking the first domestic issuance of 2026.
The latest issuance brings total domestic debt raised in the current FY25/26 to KWD2.5 billion.
“Adding this to KWD3.46 billion in international issuances, the Finance Ministry raised a total of KWD5.96 billion. This means the Ministry is nearing its target to cover a budgeted KWD6.3 billion fiscal deficit during the current fiscal year,” said Mohamed Abu Basha, Head of Macroeconomic Analysis at EFG Hermes.
Kuwait issued a new debt law in March 2025 aimed at trimming the deficit. The draft budget for 2026–2027 forecasts a deficit of about KWD9.8 billion, nearly 55% above the current fiscal year’s shortfall, as lower global oil prices weigh on revenues.
In December, the IMF revised its estimate of Kuwait’s finances and projected a widened budget deficit of KWD6.31 billion for 2025–26, equivalent to nearly 12% of GDP.
(Reporting by Brinda Darasha; editing by Daniel Luiz)
