“Missing” Guantanamo returnee back at home: family

(Reuters) – An Algerian repatriated from the U.S. military prison in Guantanamo Bay was resting at home on Monday, his family said, ending a week-long search for him that prompted rights groups to say he could be suffering abuse.

Uncertainty over the whereabouts of Abdul Aziz Naji had fueled allegations from rights campaigners that U.S. President Barack Obama’s push to close Guantanamo Bay was leaving former detainees at risk of mistreatment once they were sent home.

Naji, who had been held at Guantanamo since 2002, had told his lawyers he did not want to return to Algeria under any circumstances because he feared persecution from the Algerian government and Islamist militants there.

“He is back home, tired, but he is free,” his brother Hamza told Reuters by telephone from the town of Batna, 500 km (300 miles) east of the Algerian capital.

“He did not say that he had been abused during his detention,” he said.

Earlier, Algerian justice officials said a judge on Sunday had ordered Naji’s release after a period of detention — which they said was completely lawful — following his July 18 return from Guantanamo Bay to Algeria.

“Contrary to what has been falsely reported, this person’s case has been dealt with in the most complete transparency and in respect for the law, whether in terms of procedure or the length of his detention,” the Algiers prosecutor’s office said in a statement.

COURT APPEARANCE

The statement said Naji had been held in detention in Algeria in accordance with legislation allowing terrorism suspects to be held for up to 12 days before appearing in court.

It said he was freed after appearing before a judge on Sunday who put him under judicial control — which means he has to report regularly to police pending a decision on his case.

“He is at home in Batna,” said a judicial source who did not want to be identified. “He just needs to go every week to the local police station to sign a form.”

Obama has made a pledge to close down Guantanamo Bay, which has been condemned by civil liberties advocates since it was opened by the Bush administration in the wake of the September 11, 2001 attacks on U.S. cities.

But resettling inmates from the U.S. base on Cuba has proved difficult, and any evidence that former detainees are mistreated after being sent home could make it harder for Obama to meet his commitment.

U.S. rights groups said last week they were worried because Naji’s lawyers and family had been unable to locate him since his return. They said they believed he could be in secret detention in Algeria.

Algerian officials deny abusing prisoners. Rights groups say that before Naji’s return, 10 Algerians had been repatriated from Guantanamo Bay. Western diplomats say none of them has been mistreated since they came back.

(Writing by Christian Lowe; editing by Andrew Roche)

10-year-old British girl fights off two men who tried to rape her in Dubai

Dubai, Apr 29(ANI): A ten-year-old British girl was reportedly attacked by two men who tried to rape her near her parent’s home in Dubai.

According to reports, the girl had gone to look for mice in a sandy play area close to her home, when one of the sex fiends grabbed her round the waist while the other attempted to remove her clothes.

However, she managed to fight them off by kicking the men and screaming, before running away.

Her family found her more than two hours later with a security guard from the complex where she lives.

Meanwhile, a Bangladeshi national, Abdul Aziz, has been charged with attempted rape and has appeared in court in Dubai.

Aziz is said to have admitted that he stopped the girl, then tried to undress her for sex, but she escaped after struggling violently.

“It was an extremely serious assault. The prosecution say there was clear intent to rape or carry out a serious sexual assault on the girl,” The Sun quoted a Dubai court source, as saying.

“She was very lucky to escape and very brave to have fought back. Her parents were frantic when she disappeared and incredibly relieved when she was found,” the source added.

The trial has been adjourned until a date to be fixed next month. (ANI)

MIC chief to apologise to Dr Mahathir over ‘slipper garland’ insult

Kuala Lumpur, Sep 18 (ANI): Malaysian Indian Congress president S. Samy Vellu has said that he will personally apologise to former prime minister Dr Mahathir Mohamad over the ‘slipper garland’ insult by a MIC member during the recent party congress.

He said he would seek an appointment with Dr Mahathir to tender his apology over the incident.

“I will meet him personally to explain the whole episode and extend my apology,” Samy Vellu said in a statement on Thursday.

The MIC chief said he and the MIC regretted the incident. “I have always had the highest respect for Tun Dr Mahathir. He is a great leader and a statesman.”

He said Dr Mahathir had brought tremendous development to the country and had united the people. “He will always be respected by us and all Malaysians,” The Star quoted Vellu, as saying.

Meanwhile, Dr Mahathir said he did not feel anything about the incident and added: “Nothing would have happened to me.”

Instead, he said he would have felt angry and saddened if Umno members had made such an insult.

“This is not the first time I have been insulted. People might have forgotten how Umno leaders had insulted me. Nazri (Minister in the Prime Minister’s Department Nazri Abdul Aziz) and the previous mentri besar of Kedah wanted me expelled from Umno.

However, then no one gave any reaction. No one dared to say anything,” he said. (ANI)

No pressure from Saudi Arabia on Musharraf trial: Ishaq Dar

Islamabad, Sep 14 (ANI): Saudi Arabia has not, in any way, pressurised Pakistan Muslim League-Nawaz (PML-N) chief Nawaz Sharif regarding former president Pervez Musharraf’s trial under Article 6 of the constitution, said party senator Ishaq Dar.

After meeting the Saudi king along with Nawaz, Dar said the Saudis never interfered in internal affairs of Pakistan.

Saudi King Abdullah Abdul Aziz advised Sharif to avoid controversial issues and promote reconciliation for the continuation of the democratic system in Pakistan.

Sharif, who is in Saudi Arabia, met King Abdullah on Sunday and discussed matters of mutual interest including national, regional and international issues.

The sources said during the meeting King Abdullah advised Sharif to adopt a reconciliation policy in the country, the Daily Times reported.

Sharif was also asked to avoid touching controversial issues and play his role to steer the country out of political instability, the sources added. (ANI)

Saudi king asks Sharif to avoid controversial issues

Lahore, Sep 14 (ANI): Saudi King Abdullah Abdul Aziz has advised PML-N chief Nawaz Sharif to avoid controversial issues and promote reconciliation for the continuation of the democratic system in Pakistan.

Sharif, who is in Saudi Arabia, met King Abdullah on Sunday and discussed matters of mutual interest including national, regional and international issues.

The meeting, which lasted for more than one hour, was also attended by PML-N leader Ishaq Dar, Sharif’s son Hasan Nawaz and Saudi intelligence chief Prince Muqrin bin Abdul Aziz.

The sources said during the meeting King Abdullah advised Sharif to adopt a reconciliation policy in the country.

Sharif was also asked to avoid touching controversial issues and play his role to steer the country out of political instability, the sources added.

The sources said Saudi authorities had asked Sharif to withdraw his demand for trying Musharraf under Article 6 of the constitution, The News reported.

Also, the Gulf Times claimed that Nawaz was not given the highest level of protocol, which implied that the Saudis were not happy with him.

Speaking to the media after the meeting, Ishaq Dar, however, said the issue of the trial of former president Pervez Musharraf was not discussed in the meeting, because the Saudi Government had no intention of interfering in the country’s internal matters but was keen to see political stability. (ANI)

PPP has not given any ‘guarantee’ regarding Musharraf indemnity: Kaira

Islamabad, Sep.4 (ANI): Pakistan Information and Broadcasting Minister Qamar Zaman Kaira has rebutted reports regarding Pakistan People’s Party (PPP) giving assurance not to prosecute former President General Pervez Musharraf on high treason charges.

Kaira said the PPP has not given any ‘guarantee’ to any country regarding clemency to Musharraf.

“Though friendly countries generally give advice on various matters but it is not binding on the government,” Kaira said.

In an interview with The Nation, he categorically rejected media reports that Musharraf’s step down was pre-planned and a part of a ‘secret’ arrangement.

“PPP had expelled Musharraf from Aiwan-e-Sadr with the support of masses,” he stressed.

When asked about Interior Advisor, Rehman Malik’s visit to Saudi Arabia, just before Musharraf’s meeting with king Abdullah bin Abdul Aziz, Kaira said it was a routine affair and it had nothing to do with the Musharraf issue.

Kaira also denied presence of US Blackwater on Pakistani soil, saying Islamabad would never allow any private security agency to operate inside country’s territory.

“Some personnel of private security agencies of the US after taking clearance by the government are protecting the NATO trucks which transport supplies from Port Qasim to Afghanistan and nothing else,” he said.

“As the US is leading war against terror therefore its facilities and staff are more prone to terror attacks than other countries therefore they need more security to protect themselves,” he added. (ANI)

“Optimistic” Musharraf leaves for London in ‘high spirits’ after Saudi visit

Riyadh, Sep.3 (ANI): Former Pakistan President General Pervez Musharraf has returned to London after his three day visit to Saudi Arabia, and it seems his tour has yielded the desired results.

Musharraf, who had a long one to one talk with King Abdullah amid speculations of yet another Saudi-backed political arrangement in Pakistan, was in ‘high spirits’ after the meeting, sources said.

While the details of the meeting are still behind curtains, sources privy to the developments said Musharraf would disclose his future course of action only after returning to London, but as it transpires Musharraf has succeeded in his aim to ensure a safe return to Pakistan without any fears of being tried for high treason under Article Six of the Constitution.

“Musharraf was in ‘high spirits’. His body language was ‘positive’ and he sounded ‘very optimistic’,” The Dawn quoted sources close to the former general, as saying.

It is worth mentioning here that Musharraf had resigned from the Presidency last year, following an agreement in which Saudi Arabia was one of the guarantors.

The accord says that Musharraf would not be tried in any court. The US and Britain are believed to be the other two guarantors of the agreement, which has been kept secret.

While the Pakistan Muslim League-Nawaz (PML-N) is pushing for Musharraf’s trial under high treason charges, observers believe that it would be naïve to think that PML-N chief and former Prime Minister Nawaz Sharif is unaware about the agreement.

Sources also revealed Sharif may visit Riyadh next week where he is likely to meet King Abdullah bin Abdul Aziz. He will also have meetings with some other Saudi leaders including Prince Mukrin, chief of the Saudi Intelligence Agency. (ANI)

Implement sharia in Pak or face bloody revolution: Lal Masjid head

Islamabad, July 11 (ANI): The head of Pakistan’s radical Lal Masjid, Abdul Aziz, has threatened the Pakistan Government of launching a ‘bloody revolution’, if the Zardari-led coalition fails to enforce an Islamic system in the country through parliament.

Addressing the Second Shuhda-e-Lal Masjid Conference at the Lal Masjid, Aziz said the government has not been able to make any progress in the probe into the Lal Masjid Operation, which took place two years ago, the Daily Times reports.

Demanding the operation to be declared extra-judicial, Aziz clarified that his release was not part of any deal with the government.

Speaking on the occasion, member of the NWFP assembly Mufti Kifayatullah demanded the government cease its military operation in the province and initiate a dialogue with the Taliban.

He alleged that Pakistan Army was ‘killing its own people at the behest of the US’.

Strict security arrangements were put in place this time around, considering last year’s conference where many policemen and civilians were killed in a suicide attack. (ANI)

Former Pak MNA nabbed with Mehsud’s letter to ex-ISI official

Islamabad, June 28 (ANI): Former Member of the National Assembly (MNA) Maulana Shah Abdul Aziz has been apprehended with a letter written by Tehrik-e-Taliban (TTP) chief Baitullah Mehsud to a former ISI general, strengthening the notion that links between banned militant organizations and the ISI are as strong as ever.

Aziz was picked up by intelligence operatives after his meeting with Lal Masjid cleric Maulana Abdul Aziz.

Interior Ministry sources said that Mehsud, in his letter, has thanked the ISI official, who is known for his pro-Taliban views, for opposing the Swat military operation and defending the philosophy of the Taliban.

Aziz was detained for investigation after he was found travelling with Fidaullah, a top Taliban leader who is believed to be the mastermind of the recent suicide bombing in Islamabad and other adjacent areas, The News reports.

Security officials are still probing the issue. The ISPR has denied having any information on the matter.

“I have no information on this subject,” the ISPR DG, General Athar Abbas said. (ANI)

Extremism is Pakistan’s biggest threat: Musharraf

Lahore, May 26 (ANI): Former Pakistan President Pervez Musharraf has said that extremism poses the biggest threat to Pakistan.

In an interview to a private TV channel, Musharraf claimed that Islamabad has taken several steps to thwart extremism, and criticism in this regard was baseless.

He urged both India and Afghanistan to join Pakistan in initiating some harsh measures to root out extremism from the region.

Commenting on the Swat offensive, the Daily Times quoted him as saying that the security forces should remain in the valley even after the operation is called-off.

Musharraf also defended the Lal Masjid operation, claiming that several male and female suicide bombers were hiding inside the mosque when the operation was launched.

He said everything was done to resolve the issue through peaceful dialogue, but ultimately a security operation has to be launched.

“Abdul Aziz was challenging the writ of the government. I sent many people to counsel him, including members of the Islamic Ideology Council, the wife of Abdul Sattar Edhi and the Imam of Ka’aba,” Musharraf said. (ANI)

Hindraf leaders no longer a threat to Malaysia: Minister

Putrajaya, May 21 (ANI): Minister in the Prime Minister’s Department Mohamed Nazri Abdul Aziz has said Hindu Rights Action Force (Hindraf) leaders are no longer deemed a threat to Malaysia.

The Hindraf, which is a coalition of 30 Hindu non-governmental organizations committed to the preservation of Hindu community rights and heritage in a multiracial Malaysia, was declared an illegal organisation last year.

Mentioning the now-defunct Communist Party of Malaya (CPM), which remained outlawed despite its former members being freed, Nazri said: “In the case of CPM, its former members sat down with the government and pledged to abandon their ideologies. But CPM remains a banned party. It does not mean that since Hindraf leaders were released, the ban on their organisation has been lifted.”

All five Hindraf leaders held under the Internal Security Act were recently released, New Strait Times reports. peaking about the formation of the Malaysian Makkal Sakthi Party by several key Hindraf members, Nazri said they had the right to do so.

Its pro-tem secretary-general, Kannan Ramasamy, had said since Hindraf was outlawed, it was timely that the movement and its support base found an alternative conduit to champion the Indian cause.

He said the new party would remain neutral and work with whichever coalition that was willing to support Hindraf’s 18-point demand. (ANI)

Seven accused of killing Kashmir varsity vice chancellor acquitted

Jammu, April 20 (IANS) A Terrorism and Disruptive Activities (TADA) court here Monday acquitted seven men accused of kidnapping and killing the then Kashmir University Vice Chancellor Mushir-ul-Haq, his private secretary and Hindustan Machine Tools (HMT) general manager H.L. Khera in 1990.

The seven are Tahir Mir, Ghulam Qadir Mir, Shabir Ahmad Bhat, Abdul Aziz Zargar, Mohammed Sadiq Rather, Mushtaq Ahmad Khan and Mohammad Salim Zargar.

The vice chancellor, his secretary, and Khera were abducted in Srinagar by the Students Liberation Front in April 1990, who demanded three jailed terrorists be released. However, the then Governor Jagmohan rejected the demand, following which all the three captives were killed.

While the body of Khera was found at Batmalloo area, the bodies of Mushir-ul-Haq and his secretary were found in Padshahi Bagh, both of Srinagar, five days after their abduction.

The Central Bureau of Investigation (CBI) was asked to investigate the case, but even after 19 years, nothing could be proved against the accused.

Pakistan in danger,says Musharraf

Islamabad, April 19 (IANS) Former Pakistan president Pervez Musharraf Sunday said ‘the country is in great danger’, and added that the people should not get bogged down by minor issues and focus on bigger challenges.

‘Pervez Musharraf said that the country was in great danger and advised all to shun looking into the past,’ the News International reported Sunday.

Before leaving for Saudi Arabia, Musharraf urged upon the nation to focus on the current myriad challenges being faced by the country.

The people, instead of bogging down in minor issues, should think about the future of Pakistan, Pakistan News quoted him as saying.

Talking to mediapersons at Islamabad airport, Musharraf said the people playing with the Lal Masjid issue were enemies of the country.

‘Only 94 persons were killed in Lal Masjid, which were terrorists.’

‘If any action is initiated against me, I will respond to it,’ he said.

Military commandos stormed the Lal Masjid in July 2007 to end a standoff with armed pupils of Maulana Abdul Aziz.

Pakistan has caved in to terror: Editorial

Islamabad, April 18 (IANS) The imposition of Sharia laws in parts of Pakistan’s restive northwest and the release of a Taliban-linked cleric is ‘evidence’ that the government has ‘caved in’ to terror, an editorial in a leading English daily said Saturday.

A commentary in another newspaper said ‘fighting back’ was difficult because Pakistan had not been able to develop a consensus on the alternative to fundamentalism.

The release of Maulana Abdul Aziz of Islamabad’s Lal Masjid ‘could not have come at a worse time’, The News said, adding: ‘The recently signed Nizam-e-Adl (Sharia regulation) in Swat has been widely interpreted as evidence that the government has caved in to terror.’

The editorial was headlined ‘The red peril?’

‘Fighting back is difficult because we have never developed a consensus on an alternative. Jinnah’s Pakistan versus Ziaul Haq’s Pakistan – having never quite figured out what we want to be, we now face the very possibility that the Taliban may decide for us,’ a commentary in Dawn said.

It was headlined ‘Cowering before the Taliban’.

The News said the fact that Aziz, who was captured 21 months ago while trying to sneak out of the mosque in a burqa ‘will now be heading its affairs once more adds to the suspicions of complete capitulation’.

Aziz, released on bail on Supreme Court orders, has said he will not seek revenge, but ‘this is no reassurance’, the editorial maintained.

Aziz was taken from jail to Lal Masjid by a bevy of supporters ‘shouting slogans of martyrdom’ and ‘this too suggests the old passions that led to students armed with sticks emerging from madrassas housed at the masjid and attempting to impose their own brand of morality on Islamabad live on’, the editorial contended.

Noting that over the past few weeks ‘there has been continued speculation that Islamabad could become the next target for militants’, The News said the ‘possibility’ of militants ‘driving through’ the capital ‘waving guns is one we are today forced to contemplate.

‘The fact that a man such as Abdul Aziz has walked out of jail, to a hero’s welcome, underscores why this is the case. Our failure to tackle militancy means the threat posed by it grows every minute.

‘Will we be able to turn it back before it is too late? That is the question now on every mind,’ the editorial maintained.

‘Quite obviously,’ it said the ‘conquest’ of the capital would be ‘a spectacular gain on their part.

‘Within security circles too, there are those who hint that a threat may indeed exist – if not immediately than in the not too distant future,’ the editorial pointed out.

Dawn was equally harsh in its criticism of the manner in which the government was functioning.

‘In this wretched, unfortunate land, anger and despair have been wasted emotions. After all, while we may never have known how to fix things, at least we could be relatively sure that they wouldn’t get much worse.

‘But as things begin to fall apart, the assumptions of yore are crumbling before our eyes. And the good and the great – the few that there are – are on the retreat.

‘Many have written of their horror at the pact with the butchers of Swat, the grotesqueness of signing a Sharia deal with men who stand outside the pale of any religion,’ Dawn noted.

Pointing to the almost non-existent voices that were raised when the National Assembly debated and passed the Sharia bill Monday, Dawn said: ‘It’s all very carefully calibrated. Cause minimal offence, upset no sensibilities, avoid stepping on toes.

‘Can no one in this country stand up and say this: we do not want to live in a society where a man, woman or animal is flogged, where anyone’s limb is hacked off, where anyone is stoned. Period.

‘It doesn’t matter who is demanding it or why. Be it the purest of hearts or the most evil of men; be it with the best of intentions or the worst,’ the commentary maintained.

Musharraf says no woman or child was killed in Lal Masjid operation

Islamabad, Apr. 20 (ANI): Former Pakistan President General (r) Pervez Musharraf has claimed that no child or woman was killed in the controversial military operation conducted in Lal Masjid in 2007.

“It is time to end the lies. Those who say women and children were killed and several hundreds died in the Lal Masjid operation are telling white lies. Only 94 people were killed and all of them were terrorists and extremists. Not a single woman or child was killed,” the Dawn quoted Musharraf, as saying.
However, Pakistan Muslim League-Quaid chief Chaudhry Shujaat Hussain rejected Musharraf’s claim, by saying that there were some children and women present when the operation was carried out against the militants.

“I do not know the exact number of children and women that were inside the mosque during the operation but it is a fact that the mother of Maulana Abdul Aziz (Imam of Lal Masjid) was among those killed in the battle,” said Hussain, who was in power during Musharraf’s regime.

Shujaat added that he had opposed the launching of operation, and even Musharraf, recently, had admitted this fact.

Controversy still prevails about the killing of women and children, and nobody exactly knows the entire truth.

Even Lal Masjid’s Khatib Maulana Abdul Aziz after his release on bail said, “It is quite difficult to tell the exact number of total women and children killed in the mosque during the operation.”

Musharraf, who was leaving for Saudi Arabia for Umrah, also did not have any clear view on the peace deal with the Taliban in the northwestern Swat valley.

“Nothing can be said. If the agreement is only for ensuring speedy and cheap justice within the Pakistani legal structure and system, then it is all right. But from a position of weakness, if the Taliban want to challenge the writ of the government, the deal is dangerous and should not be allowed,” Musharraf said. (ANI)

Hate literature, militant videos up for sale again outside Lal Masjid in Lahore

Lahore, Apr.16 (ANI): Days after the release of Maulana Aziz, the sale of hate literature and militant videos have once again started near Lal Masjid.

The publication and distribution of hate literature and militant videos has been banned by the government, but such materials propagating ‘jihad’ have once again surfaced, and are being openly sold out side the Lal Masjid, the Dawn reports.

Videos available in the market contain shots of the war in Iraq and Afghanistan, and show rebels attacking the US led allied forces to provoke others to join in the fight.

Local people said that following Aziz’s return, all the activities which were banned would be restored in the area.

“Now that Maulana Aziz has been restored, all activities will return,” a local video seller said.

Lal Masjid was run by Islamic militants led by brothers, Maulana Abdul Aziz and Abdul Rashid Ghazi, who continued to challenge the government for more than six months. They carried out violent demonstrations, hateful speeches, destruction of private and public property, kidnapping, arson and armed clashes with the authorities.

The masjid complex was besieged from July 3, 2007 to July 11, 2007, after negotiations between the government and the militants failed.

The complex was stormed by the Pakistani Army and members of the Special Service Group and re-taken. The overall conflict resulted in death of 154 people, and 50 militants including Aziz were captured alive.(ANI)

Pakistan’s Red Mosque cleric freed

Islamabad – Pakistani authorities on Thursday freed the hard-line cleric at Islamabad’s radical Red Mosque, Maulana Abdul Aziz, a day after the Supreme Court granted him bail.

Deputy Commissioner Islamabad Asadullah Faiz told German Press Agency dpa that police had been withdrawn from Aziz’s residence in the garrison city of Rawalpindi.

“He is a free man now, and he can go wherever he wants,” he added.

Hundreds of Aziz’s followers gathered outside his residence, where he had been in detention, as the hard-line cleric drove away in a vehicle to an undisclosed location.

Aziz was arrested trying to escape disguised as a woman during a stand-off in July 2007 between security forces and his armed followers entrenched in the Red Mosque and adjoining girl’s seminary.

The conflict ended with a military commando operation that left more than 100 people dead, according to official claims.

Militant Muslims claim that more than 3,000 female students also died in the operation. The government denied this, but the military action sparked revenge suicide attacks across the country.

Pakistani authorities later filed 27 criminal cases against Aziz that included conspiracy to murder and anti-state activities. However, during the court proceedings, Aziz was granted bail in 25 cases and charges were dropped in one case.

In the last case, a three-member bench of the Supreme Court on Wednesday ordered the cleric’s release, observing there was no sufficient material available on record against Aziz. “Therefore, he deserved to be granted bail,” said the court order. (dpa)

Pakistan Supreme Court grants bail to Red Mosque cleric

Islamabad – Pakistan’s Supreme Court Wednesday granted bail to a radical cleric who incited a standoff with security forces at Islamabad’s Red Mosque and adjoining seminary nearly two years ago, his lawyer said. “The court has observed that there was no evidence against Maulana Abdul Aziz in this case that could prevent his release on bail,” attorney Shaukat Aziz Siddiqui told reporters.

The court ruling followed a petition filed by Aziz challenging the earlier denial of bail by a lower court in a case regarding the illegal occupation of a state-owned library adjacent to the mosque.

Authorities had filed 27 criminal cases against the cleric after he was arrested trying to escape disguised as a burqa-clad woman, shortly before military commandos stormed the Red Mosque to end the standoff with his armed pupils in July 2007.

The “Operation Silence” left more than 100 people dead, including around a dozen security personnel, according to the government.

Aziz has already been granted bail in 25 other cases while charges against him in one case were dropped.

“Maulana Abdul Aziz is expected to be released within two to three days,” Siddiqui said.

The military attack on the Red Mosque sparked a series of suicide attacks across Pakistan. Militant Muslims claim that more than 3,000 female students in the adjoining girls’ seminary also died in the operation. The government denied those allegations.(dpa)

Kuwait cbank says rate cut to catalyse economy

KUWAIT, April 12 (Reuters) – Kuwait’s central bank said it would reduce its benchmark discount rate by 25 basis points to 3.5 percent from Monday to reduce the cost of funding and catalyse the local economy, the state news agency reported.

“The decision to cut the discount rate at the central bank of Kuwait contributes another dose to push the wheel of local economic activity through cutting the cost os finance,” Sheikh Salem Abdul-Aziz al-Sabah said, according to KUNA.

The move coincides with the enactment of a state support package for the financial sector, Sheikh Salem said.

(Writing by Inal Ersan; Editing by Daliah Merzaban)

Kuwait cuts key rate from Monday to stimulate economy

Kuwait central bank cuts discount rate to 3.5 pct

* Move will reduce financing costs, stimulate economy

(Adds analyst, details, background)

By Rania El Gamal

KUWAIT, April 12 (Reuters) – Kuwait’s central bank has decided to cut its benchmark discount rate by 25 basis points to 3.5 percent effective Monday to reduce the cost of funding and stimulate the local economy, the state news agency reported.

The reduction would take the total benchmark rate cut by the world’s seventh-largest oil exporter to 225 basis points since October, when the government was forced to rescue Gulf Bank (GBKK.KW) after it recorded steep derivatives losses.

“The decision to cut the discount rate at the central bank of Kuwait contributes another dose to push the wheel of local economic activity through cutting the cost of finance,” Sheikh Salem Abdul-Aziz al-Sabah said, according to KUNA.

Sheikh Salem said last month he expected the economy to contract this year as oil prices slump and economic activity is hit. [ID:nLO963520]

KUNA did not say whether the central bank had also decided to cut its repurchase rates. Kuwait last reduced its discount rate by 50 basis points to 3.75 percent in December.

Since the global financial crisis deepened in the autumn, Gulf oil producers announced a slew of measures to unlock credit markets, including in the case of Kuwait guarantees of bank deposits and state equity investments.

“At the moment they are trying to use a number of tools available to support growth,” said Monica Malik, a regional economist at EFG-Hermes in Dubai.

“Although these moves will support bank lending to a degree, we are still forecasting a marked deceleration in credit growth.”

STATE SUPPORT

Since approaching 5 percent in late September, the three-month Kuwaiti interbank rate has fallen to 2 percent, indicating that while banks had funds, they were reluctant to extend fresh loans.

Kuwait’s central bank has issued treasury bonds worth about 480 million dinars in the last two months to soak up some of this liquidity.

The latest interest rate move coincides with the enactment of a state support package for the financial sector, Sheikh Salem said on Sunday.

Kuwait’s emir dissolved parliament in March, which gave the government the authority to push through an economic support package by decree that is designed to enable banks to lend about 4 billion dinars ($13.76 billion) in the coming two years.

The plan, which would cost the state 1.5 billion dinars, includes state guarantees of up to 50 percent of new loans.

Sheikh Salem told Reuters last month he expected credit growth of not less than 19-20 percent this year as a result of the bill.

Kuwait, the only Gulf state that does not peg its currency to the U.S. dollar, has also allowed its currency to depreciate in an effort to reduce import costs and help bolster its dollar-denominated oil revenues, the governor said last month.

Several local banks have been demanding the discount rate — which guides lending and deposit rates — to be lowered to help shore up their businesses, according to media reports. ($1=.2907 Kuwaiti dinar) (Additional reporting by Inal Ersan and Daliah Merzaban in Dubai; editing by Mike Nesbit)