Hamza Abbas Passes Away: The First Signatory of the Dinar, Remembered

Kuwait has lost its first Governor of the Central Bank of Kuwait, Hamza Abbas Hussein, at the age of 92, following an economic and banking career intertwined with the foundational and developmental stages of Kuwait’s monetary system. During this period, he was among the most prominent figures who contributed to building the institutional framework for banking and monetary operations.

In the introduction to his memoirs, *I Advised You...*, Hamza Abbas summarized his experience in public office as “part of what he lived through while holding positions of responsibility during a phase that served as the foundation of modern Kuwait.” He stated that his recounting of history was aimed at benefiting future generations, rather than documenting a personal biography of achievements.

On one hand, Abbas is classified as one of the pioneers of the state’s institutional structure, specifically its monetary arm. As the first Governor of the Central Bank, he led the institution from September 12, 1973, to September 11, 1983, witnessing its establishment and shaping its policies.

On the other hand, Hamza Abbas succeeded in establishing the principles of monetary work during critical stages of Kuwait’s economic history, facing pivotal financial crises, most notably the “Souq Al-Manakh” crisis.

Abbas’s connection to the economy, monetary policy, and banking began early in the development of Kuwait’s financial apparatus. He was appointed Secretary of the Kuwait Monetary Agency in 1963, then moved to the Central Bank as Deputy Governor in 1968, concurrently performing the duties of Governor. He also served as Deputy Governor of Kuwait at the International Monetary Fund, a position he held until 1983, thereby likely becoming the first Governor to sign the modern Kuwaiti dinar in 1973.

His transfer to the Central Bank occurred during the bank’s establishment and the formation of its institutional framework. He was part of the generation that assumed responsibility for establishing and consolidating monetary and banking practices in the country, and for developing the relationship between the bank, the banking sector, and government economic entities. Under his tenure, monetary tasks evolved from merely issuing currency—as the Kuwait Monetary Agency had been tasked—to a comprehensive organizational structure with five main functions: issuing currency, supervising the banking sector, managing the Government Bank and the State’s Advisory role, and overseeing the country’s liquidity system.

On September 12, 1973, Hamza Abbas Hussein assumed the position of Governor of the Central Bank, serving until September 11, 1983. Notably, he had acted as Governor since the Central Bank’s establishment in 1968, a period marked by significant expansion in the Kuwaiti economy and a rise in banking and investment activity, coinciding with the transformations imposed by the oil boom on the economy and financial sector.

A notable highlight of Abbas’s career was the delinking of the dinar from the US dollar in 1973, in favor of determining its exchange rate based on a weighted basket of currencies from countries with significant trade and financial ties to Kuwait.

This move for the modern dinar came after the historical event known as the “Nixon Shock,” when US President Richard Nixon abolished the direct international convertibility of the dollar to gold. Abbas successfully decoupled the dinar from the dollar smoothly, driven by his prior experience at the Kuwait Monetary Agency, alongside his economic studies and banking training. This policy has proven effective, according to global rating agencies, for more than several generations to date.

In practice, the stock market crisis was one of the most critical challenges that monetary policy and the banking sector faced during his tenure. Abbas documented his experience in his memoirs, “And I Advised You…,” noting that the value of deferred checks reached approximately 27 billion dinars, equivalent to six times the value of real credit formed in the banking sector over more than four decades. At the time, he warned of the potential spillover effects of the market’s collapse onto banks and the financial sector, and worked to prevent such an outcome.

In his memoirs, Hamza Abbas revealed the extent of the pressures he endured during the crisis, stating: “I would have been happy if the late Amir, Sheikh Jaber Al-Ahmad Al-Sabah, had accepted my request to step down, after his Highness had rejected it on two previous occasions during the stock market crisis. That would have freed me from the inevitable nightmare—the collapse of the market.”

After completing his term at the Central Bank in 1983, Abbas continued his activities in the economic field through his membership in the Supreme Council for Planning, the Supreme Committee for Development and Economic Path Reform, the Foreign Investment Committee, and the Supreme Council for Education. He also served on the boards of directors of several banks and investment companies in Kuwait and abroad, and worked as an advisor to the Financial and Economic Committee of the National Assembly.

His contributions did not stop at institutional work; Hamza Abbas continued to present his vision on economic and developmental issues through his articles in local press, which covered the economy, education, and the future of development in Kuwait.