Bahrain expects to return to the international bond market this year despite its long-term issuer rating being downgraded last year, according to Bahrain Central Bank Governor Rasheed Mohammed al-Maraj.

"We will be going back to [the] market soon," Al-Maraj said, downplaying the higher rate of borrowing. "Part of our borrowing strategy is to foster a deeper and more liquid market domestically, we will continue to do things to improve the depth and liquidity of the domestic market," the executive told the ongoing GCC Financial Forum in Bahrain.

Pressed for more details about the planned bond issue, Al-Maraj declined to specify the value of credit it aims to raise as well as the timeline.

Bahrain has previously sold 30-year bonds.

Al-Maraj, however, acknowledged the impact of Bahrain's issuer rating  being downgraded by Moody's and the S&P last year.  "It is always an agonising period when the ratings agencies downgrade our rating due to budget deficits," Al-Maraj said, citing that the government is under pressure to strike a delicate balance on how to address its fiscal situation.

"We need to decide whether to put the brakes [on government spending] and make the economy suffer or gently address our fiscal issue by continuing with [government] programmes and be met with harsh rating downgrades."