DUBAI- Kuwaiti banks can continue to distribute dividends for 2019 and it is early to ask them to suspend dividends for 2020, the governor of the central bank said on Sunday, speaking to Al Arabiya TV.

"The exchange rate system is excellent and there is no fear for the Kuwaiti dinar," said Mohammad al-Hashel, adding that banks' average capital adequacy ratio was above 18%. The minimum ratio has been reduced to 10.5%, the governor said.

Last week, the Central Bank of Kuwait (CBK) announced a stimulus package to support vital sectors and small and medium enterprises amid the fallout from the coronavirus epidemic. 

The measures will raise banks' lending by 5 billion dinars ($16 billion), the Kuwait Banking Association said last week.

Hashel said banks had agreed to refrain from liquidating collateral assets like real estate or stocks, unless customers ask for it, "to avoid any serious decline in the markets".

Banks should not be "very strict" in refraining from lending, he said.

He added monetary policy measures taken so far were adequate, but the central bank was ready to act again if necessary.

($1 = 0.3092 Kuwaiti dinars)

(Reporting by Alaa Swilam and Dahlia Nehme; Writing by Yousef Saba and Davide Barbuscia; Editing by Mark Potter) ((Yousef.Saba@thomsonreuters.com; +971562166204))