Kuwait cuts 1-month repo, leaves benchmark steady

DUBAI, Dec 17- Kuwait's central bank reduced its one-month repurchase rate to 2.5 percent from 3 percent on Wednesday after a sharp U.S. rate cut a day earlier, but left its benchmark discount rate steady.

The central bank cut the one-month repo rate to 2.5 percent from 3 percent.

It left the discount rate at 4.25 percent and the overnight and one-week repurchase rates at 1 percent and 2 percent, respectively.

Kuwait, the only Gulf state that does not peg its currency to the U.S. dollar, revamped monetary policy tools last month by introducing new repurchase agreements to give banks more access to short-term funding.

The U.S. Federal Reserve chopped its interbank federal funds rate to a range of zero to 0.25 percent, a record low.

GULF RATES/KUWAIT