KUWAIT • Kuwait let the dinar rise for a third day yesterday after the dollar tumbled to fresh lows on global markets and investors kept up pressure on Gulf Arab central banks to let their currencies appreciate.

The dinar will trade around a mid point of 0.27415 per dollar, compared with 0.27445 the previous day, the central bank said, allowing an appreciation of 0.11 per cent.

On Wednesday the central bank let the dinar climb 0.56 per cent in the biggest single-day rise since July 25. The Kuwaiti currency is now at its highest since May 1988.

By late New York trading on Wednesday, the dollar had hit record lows against the euro, the Swiss franc and a basket of major currencies. Against the yen it was at its lowest in more than two years.

Markets expect dollar weakness and inflation to force Kuwait’s neighbours, Saudi Arabia, United Arab Emirates, Qatar and Bahrain, to allow their currencies to appreciate.

The Kuwait dinar, the currency of the Middle East’s fourth-largest oil exporter, has risen 5.47 per cent since May 19, a day before the central bank dropped its peg to the weakening dollar and adopted a basket of currencies.

Kuwait has declined to give the composition of the basket.

Kuwait’s central bank says the dollar’s decline on global markets is driving up inflation and making some imports more expensive. Kuwait pays for more than a third of its imports in euros.