The M3 measure of money supply, the broadest measure of all cash in the economy, was growing at a peak of 37 per cent in June 2008. It has since slowed dramatically and is now at the lowest rate since March 2007.

The M3 figure at the end of April stood at BD7.98bn ($21.17bn), compared to BD7.01bn at the end of April 2008.

The money supply figures are an indicator of future inflationary pressures.

Inflation in Bahrain has already started to fall. It was at 3.1 per cent in April, falling from 4.7 per cent in February (MEED 24:5:09).