Bahrain cbank plans no rate cuts
Manama, April 20, 2009
Bahrain's central bank does not plan to cut interest rates in the near future, a spokeswoman said, confirming a media report earlier on Monday and following two rate reductions in the Gulf region last week.
Bahrain's Al-Waqt newspaper on Monday cited Bahrain's central governor Rasheed Al-Maraj as saying he ruled out further interest rate cuts in the near future. A spokeswoman who declined to be identified confirmed the comments.
Earlier this month, Saudi Arabia cut by a third the interest rate it pays to commercial banks for deposits and Kuwait lowered its benchmark discount rate by 25 basis points to stimulate lending and the economy.
Most Gulf states peg their currencies to the US dollar and have generally tracked reductions in US Federal Reserve rates, which are now at virtually zero.
Since the global financial crisis deepened in the autumn, regional central banks have slashed rates and adopted other measures -- including reduce bank reserve requirements -- to unlock credit markets.
Bahrain's central bank last lowered its overnight repurchase rate and overnight secured rate, its policy lending rates, to 2.75 percent from 3.5 percent in December.
Al-Maraj told Reuters on April 1 that lowering interest rates to cope with the economic crisis would have a limited affect on the economy.
The island kingdom would not consider any non-conventional measures to stimulate lending as the country's financial institutions were in sound shape, he had said.
Like other states in the world's top oil-exporting region, Bahrain has suffered from an almost $100 a barrel slump in the price of oil since last summer.
Al-Maraj said last month the economy could grow around 3 percent this year, about half the 2008 growth level. - Reuters