The Treasury Department utilizes surplus funds and invests surplus cash in approved investment instruments such as fixed deposits (mainly G5 currencies, KWD & CNH up to 12 months), investment grade Bonds and Sukuks (local KSE listed companies with a 10 year maximum tenor, GCC and other Arab countries with a five year maximum tenor, money market funds, AAA rated funds with a focus on G5 currencies, minimum asset under management of US$ 2 billion or equivalent. KIA's participation should not exceed 10% of the fund's size.
The Treasury Department is also responsible for the purchase and sale of foreign exchange through spot, forward and swaps transactions in order to meet obligations and hedging purposes (no speculation and mainly in G10 currencies). Deals are executed with banks/financial institutions within the approved counter-party list.
The Treasury Department's credit research unit is liable for the evaluation of banks/financial institutions (Rated A- and above) to initiate a credit line with KIA for the purpose of money market and foreign exchange transactions. The credit research is regularly handling credit risk evaluation of potential investment opportunities in Bonds & Sukuk and Money Market funds. Reporting involves monitoring, controlling and preparing performance reports. Treasury's objectives include capital preservation, maintaining adequate level of liquidity to meet future commitments and maintenance of optimal return on the cash portfolio.