The Central Bank of Kuwait (CBK) was established in 1968, and it is one of the largest financial institutions in Kuwait. The Bank replaced the Currency Board which had limited power (issuance of banknotes and coins), while the CBK is also in charge of developing and implementing monetary policies and supervising bank activities. The financial and monetary policies are aimed at contributing to social and economic development of the country; stabilizing the national currency, the KWD (Kuwait Dinar); and enabling free convertibility into other currencies. The Bank is also a banker and advisor to the government. The Bank is in charge of developing credit policies to enhance national income and contribute to social and economic growth. The KWD is a very strong currency thanks to a strong market in oil exports. Oil accounts for 94% of the country’s exports. The KWD is stronger than the USD (0.30 KWD equals 1USD).
Forex Brokers under CBK Supervision
The CBK is in charge of the Forex market and all other capital markets. Forex companies in Kuwait have to comply with the rules and regulations defined by the CBK. The CBK is a serious institution, and there is not much space left for manipulations by Forex companies. They have to meet the high standards of the industry and fulfill all obligations related to getting the CBK license. Those mostly include sufficient capital for covering the risks, consumer protection, transparency, and fairness.
Advantages of Dealing with CBK Regulated Broker
The CBK takes their role as a regulator very seriously. Kuwait Forex brokers who obtain their operating licenses are the ones that employ truly transparent, fair and honest business practices. Kuwait, as a rich and financially stable country, has no need to allow shady operators. For this reason, the number of CBK licensed brokers is not big. There aren’t that many companies ready to put their entire business operation under the scrutiny of the CBK. Those who do are the ones you can fully trust with your money and your investments, as they will certainly treat you right.
Kuwait and International Forex Brokers
Many international Forex brokers also operate in Kuwait, trying to secure and attract clients from the Middle East who are also more than interested to participate in the dynamic market. The Kuwaiti, as well-off people, try to make some profits themselves by trading currencies. This is not unusual since almost entire Middle East is engaged in the Forex business. Some participate to win extra cash, others for entertainment, etc. Just like the western world, Middle East traders are also eager to place trades and to find good brokers who take good care of their clients. Forex is a global business and does not differ much in the eastern world. The business conduct, supervisory bodies, and trading styles are more or less the same all over the world. If traders would like to trade in an exotic market, they should not be discouraged by foreign cultures since the Forex business works on the same principles regardless of the destination. Traders can also look for famous brokers who are registered in the desirable foreign country. Kuwait is an attractive destination for broker companies because the value of the national currency suggests that the population is wealthy and that people would be willing to invest their money in lucrative, profitable possibilities. However, this also means that there are some Forex brokers in Kuwait who try to fly under the radar and operate without a proper license. As a rule of a thumb, if you are looking to trade with a broker offering services in a particular country, you should always look for those who are also licensed in that country. In this particular case, it means finding CBK regulated brokers. Always remember that serious brokerage firms will go that extra mile to get a local license in order to reassure traders about their intentions. While licensing process can sometimes be painstaking, it is well worth it for the companies that truly want to establish their position on the market.
Good Forex Brokers
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Finding Top Forex Brokers in Kuwait
As we said, Forex trading is pretty much the same all over the world, but bad and good brokers should be distinguished in order to avoid bad experiences and unnecessary losses. Like anywhere else, traders in Kuwait also want their brokers to be registered with a renowned regulatory body. In this case, it is the Central Bank of Kuwait. People have great trust in the CBK and believe that the Bank contributes to the market stability and safety. As far as we know, there are actually no other regulatory bodies, and therefore, if you wish to trade in the Kuwaiti market, look for a broker who is CBK licensed (even if it is an international broker). Top qualities a Forex broker has to possess apply in Kuwait as well. People here also want to get the best service, the best platforms, a variety of options, etc. Always look for these qualities, together with proper licensing, since you, as a trader, are fully entitled to high quality services in every regard, regardless of the country you are registering in.