Kuwaiti banks pull half their deposits from the CBK in 9M 2026

Kuwait’s banks are burning through their reserves at the central bank to keep lending through the war: Lenders’ deposits at the Central Bank of Kuwait (CBK) halved to KWD 2.4 bn by the end of September, from KWD 4.8 bn at the end of 2025, according to CBK data (pdf).

Wartime policy easing made this possible. In March, the CBK temporarily lowered banks’ liquidity minimums. It cut the liquidity coverage and net stable funding ratios to 80% from 100%, and the regulatory liquidity ratio to 15% from 18%. It also raised their lending ceiling and released part of their capital buffer. Banks no longer need as much cash sitting idle, and they’ve been lending it out: Credit to residents rose c. 3.4% in the first eight months, the data shows.

Banks also had room to spare when the easing began: Their liquidity and capital ratios exceeded regulatory requirements by comfortable margins, the CBK said in March.

Why it matters: The war-time stimulus provided the buffers to keep lending going, but that won’t last forever amid economic slowdown and disrupted crude flows. Kuwait’s public debt rose fivefold midway through the year. The Finance Ministry says the FY 2025-26 deficit widened nearly 13% to KWD 7 bn.

What’s next: Once the old minimums return, banks will need to rebuild that cash, and lending could slow as they do. The CBK has already asked banks how ready they are to return to pre-March liquidity rules, the Times Kuwait reports. With buffers now half the size they were in January, that unwind will test how much of this year’s lending growth banks can keep up. The mortgage law awaiting the emir’s signature would add another source of loan demand.