Bahrain central bank says liquidity remains adequate

16 October 2008
The governor of the Central Bank of Bahrain, Rasheed Mohammed al-Maraj, has said that liquidity in Bahraini dinars remained “normal' after meeting banks in the country to discuss the current global financial crisis.

Al-Maraj said the banking system in Bahrain is sound and strongly capitalised, after the meeting on 15 October.

He also urged domestic banks to release their financial results quickly to reassure investors of their health.

According to the central bank, no local bank has yet needed to make use of the country's repurchase facility, which has been set up to inject additional liquidity into the interbank lending market, indicating that liquidity in Bahraini dinars remained adequate.

On 8 October the central bank cut interest rates to 1.25 per cent, below the current US benchmark rate of 1.5 per cent, in order to help keep bank funding costs down.

The central bank also said it is now receiving daily reports from the domestic banking sector on their liquidity and weekly reports on their risk profile.

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