Steps taken by the Kuwaiti government to mitigate depletion of the treasury’s liquid assets could push back the risk of a liquidity crunch to the third quarter this year, Bank of America estimates. Kuwait’s General Reserve Fund (GRF), the sovereign fund used to cover state deficits, has been squeezed by the coronavirus-driven drop in oil prices and a continued stand-off between government and parliament on implementing measures such as a law to allowing state borrowing. The fund raised about 6 billion to 7 billion dinars ($19.87 billion to $23.19 billion) in recent months through asset swaps with Kuwait’s Future Generations Fund (FGF) – a nest egg for when the country’s oil runs out – and thanks to money returned to the GRF after a law last year halted a mandatory annual transfer of 10% of state revenue to FGF. The GRF is negotiating with state-owned Kuwait Petroleum Corporation on a new payment schedule for more than $20 billion in accrued dividends, sources told Reuters this month. While such negotiations could boost GRF liquidity, the transfers are likely to occur over a relatively long timeframe rather than on up front, said BofA.