Kuwait central bank raises key rate by 25 bps to 2.5%

(Reuters) – The Central Bank of Kuwait said on Wednesday it increased its discount rate by 25 basis points to 2.5%, after the U.S. Federal Reserve’s three quarters of a percentage point rate hike.

The Kuwaiti dinar is pegged against a basket of currencies that includes the dollar, which gives it more flexibility to stray from Fed policy than other Gulf Arab countries, which have their currencies tied to the dollar.

(This story corrects size of Fed hike)

(Reporting by Yomna Ehab and Yasmin Hussein; Writing by Yousef Saba)