$13bn loan cap revision rejected in Bahrain
Manama, May 27, 2014
Bahrain's Shura Council has rejected a request from the government to modify the terms of a BD5 billion ($13.1 billion) borrowing cap approved earlier this month.
Minister of State for Parliament and Shura Council Affairs Abdulaziz Al Fadhel and Central Bank of Bahrain Governor Rasheed Al Maraj wanted bonds to be reclassified so that they were not included in the borrowing list, said a report in the Gulf Daily News (GDN), our sister publication.
However, head of the Shura Council's financial and economic affairs committee Khalid Al Maskati said yesterday that bonds should still be considered as a means of borrowing as they were a form of loan.
"The issue is closed and the government has been saying it doesn't want to exceed BD5 billion - but from what we see here they want bonds removed, so they can seek financing beyond the cap," he said.
"We are alerting the government to stop borrowing and if it wants to do so next time, then it should be done through us - legislators.
"We, as council members, still want the government to tell us how it plans to repay the money it has been borrowing."
The Royal Decree, which was initially approved by Shura on May 5, will be now studied by parliament due to differences over the article relating to borrowing authorisation. - TradeArabia News Service