Bahrain's domestic public debt declines |
|
Continuing their slide, short-term interest rates in the Kingdom fell during the second quarter of the year as well - the three-month and six-month inter bank rates down to 2.8 per cent and 3.3 per cent respectively. These were 2.59 per cent and 2.6 per cent respectively at the end of the first quarter of the year.
Similarly, the three-month treasury bill yield declined to 2.1 per cent, down from 2.8 per cent at the end of the first quarter.
This was revealed in the Kingdom's monetary and financial trends report for the second quarter released yesterday by the Central Bank of BahrainCentral Bank of Bahrain
's Financial Stability Directorate.With the Kingdom's apex banking authority, Central Bank of BahrainCentral Bank of Bahrain
responding to the series of rate cuts by the US Federal Reserve, the CBBCBB key policy rate was also down to two per cent. It was 2.25 per cent by the end of the first quarter.Further bringing down the rates, the Kingdom slashed interest rates twice this month to thaw the frozen lending markets. It reduced its repurchase and overnight rates by a massive 125 basis points on Thursday, saying the move reflected current interbank lending rates. Bahrain's interbank rates dropped more than 30 basis points in the past two weeks.
The report said year-on-year inflation rate increased by four per cent at the end of the second quarter.
Inflation numbers released by the Central Informatics Organisation, based on a revised basket of commodities (2006 base year) showed that the consumer price index increased by 1.2 per cent for 2008:Q2.
"Trend analysis of inflation rates becomes easier in the coming months as a longer Consumer Price Index time series develops," the apex bank said in the report.
Corresponding to the reductions in the policy and other short-term rates during the second quarter, the quarterly report said the weighted lending rate for business loans increased to 6.9 per cent during the period (from 6.6 per cent in 2008:Q1). On the other hand, the rate for personal loans decreased to 7.8 per cent from nine per cent in the first quarter of the fiscal.
Average deposit rates (3 to 12 months), which decreased from 3.5 per cent to 1.6 per cent during the first quarter, witnessed a slight increase to 1.8 per cent narrowing the already big spread between deposit and lending rates. "Consequently, Bahraini individual account holders have benefited from the recent reductions in interest rates as their borrowing rates have decreased," the report said.
Total domestic credit increased by 9.8 per cent to BD5077.3 million, down from the 10.4 per cent growth in the previous quarter. The central bankcentral bank
attributed this to the slowdown in the growth of credit to the private sector from 12.5 per cent in the first quarter to 9.8 per cent in the second quarter. "However, lending to the general Government rose by 9.7 per cent, reversing the steep 19.1 per cent fall recorded during the first quarter."
Year-on-year, total domestic credit expanded by 47 per cent, far exceeding the 16.4 per cent growth rate of nominal GDP for 2007. Private sector credit showed a similar pattern, with year-on-year growth of 49.5 per cent, which is higher than the growth rate of nominal GDP. "This only shows that the lending boom to households and business enterprises is persisting."
An analysis of private sector credit components shows that business loans increased by 3.6 per cent, much slower than the 15.3 per cent in the first quarter. Personal loans grew by 20.9 per cent during the quarter, much faster than the 7.8 per cent growth in the previous quarter.
Loans with 'salary assignment' constituted the bulk of personal loans (44.4 per cent of the total), slightly down from the 46.9 per cent share recorded in the previous quarter. Business loans went primarily to the construction and real estate segment, which accounted for 35.4 per cent of the total.
Continuing the downward spiral, the size of the Kingdom's domestic public debt (securities only) fell by 7.8 per cent during the quarter from BD764.6 million to BD 705.0 million.
The decline in domestic public debt was largely due to a decrease of BD131.6 million in Islamic leasing securities (Ijara sukuk). Outstanding treasury bills on the other hand increased to BD180 million while Al Salam Islamic securities remained unchanged at BD18 million.
During the period, the Bahraini dinar depreciated slightly against the Pound Sterling and appreciated against other key currencies (Euro, Yen, and Swiss Franc). The latest available data for end-2008:Q2 indicates that the Bahrain's Real Effective Exchange Rate (REER) was still trending downwards, suggesting continued improvements in Bahrain's international competitive position.
© Bahrain Tribune 2008
x
DISCLAIMER
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Zawya is a distributor (and not a publisher) of content supplied by third parties and subscribers. Any opinions, advice, statements, services, offers, or other information or content expressed or made available by those third parties, including information providers, subscribers or other users of the Service, are those of the respective author(s) or distributor(s) and not of the Company. The Company neither endorses nor is responsible for the accuracy or reliability of any opinion, advice or statement made on the Service by anyone other than authorized Service employee spokespersons while acting in their official capacities. The Company is not responsible for any infringement of intellectual property rights or breach of any applicable law or regulation, including regulation in relation to financial services or the distribution of financial products, defamation, data protection, telecommunications (including regulations relating to excessive use, spamming or other abusive activities) or obscene, offensive or illegal content). Under no circumstances will the Company be liable for any loss or damage caused by a member's reliance on information obtained through the Service. It is the responsibility of member to evaluate the accuracy, completeness or usefulness of any information, opinion, advice or other content available through the Service. Please seek the advice of professionals, as appropriate, regarding the evaluation of any specific information, opinion, advice or other content.
Read the full Member Agreement
http://www.zawya.com/legal/NewsLetter.cfm?name=disclaimer
Community Comments (0) - 
Comment on this article 
Comment on this article
The opinions of the authors expressed herein do not necessarily state or reflect Zawya. Read our Comment Policy.
Loading ...
Zawya Comment Policy:
-
Zawya encourages you to add a comment to this discussion. You agree that when you add content to this discussion your comments will not:
1.1 Contain any material which is libelous or defamatory of any person, is obscene, offensive, hateful or inflammatory or causes damage to the reputation of any person or organisation.
1.2 Promote sexually explicit material, violence, discrimination based on race, sex, religion, nationality, disability, sexual orientation or age or any illegal activity.
1.3 Be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence.
1.4 Be threatening, abuse or invade another's privacy, or cause annoyance, inconvenience or needless anxiety.
1.5 Be used to impersonate any person, to misrepresent your identity or affiliation with any person, or be likely to deceive any person.
1.6 Give the impression that they represent Zawya.
1.7 Advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse. - The content posted on www.zawya.com is created by members of the public. The views expressed are theirs and unless specifically stated are not those of Zawya. Zawya reserves the right to review all comments prior to posting and edit or delete any contribution, but Zawya is not responsible for and can not be held liable for any content posted by members of the public on www.zawya.com.
- Zawya is not responsible for the availability or content of any third party sites that are accessible through www.zawya.com. Any links to third party websites from www.zawya.com do not amount to any endorsement of that site by Zawya and any use of that site by you is at your own risk.
- By submitting your comment, you hereby give Zawya the right, but not the obligation, to post, air, edit, exhibit, telecast, webcast, re-use, publish, reproduce, use, license, print, distribute or otherwise use your comments worldwide, in perpetuity.
Community Buzz
Stories
Companies
Most viewed companies by Community in the last 24 hrs
| Company Name | Country | Industry |
| Consolidated Contractors Company | Overseas | Construction and Design |
| Saudi Telecom | Saudi Arabia | Telecommunications Services |
| Saudi Binladin Group | Saudi Arabia | Construction and Design |
| Hyundai Engineering and Construction Company - Saudi Arabia | Saudi Arabia | Construction and Design |
| Zuhair Fayez Partnership Consultants | Saudi Arabia | Construction and Design |
| Ministry of Health - Saudi Arabia | Saudi Arabia | Ministries and Municipalities |
| Oman Insurance Company | UAE | Insurance |
| Dubai Electricity and Water Authority | UAE | Electric Utilities |
| Department of Economic Development | UAE | Regulatory and Administrative Bodies |
| Nissan Motor Egypt | Egypt | Transportation Products |
Projects
Most viewed projects by Community in the last 24 hrs
| Project Name | Country | Sector |
| ADNOC/ConocoPhillips - Sour Gas Fields Development - Shah Field | UAE | Oil and Gas |
| ENEC - Nuclear Power Plant | UAE | Power and Water |
| SATORP - Jubail Refinery and Petrochemical Complex | Saudi Arabia | Oil and Gas |
| Takreer - Ruwais Refinery Expansion | UAE | Oil and Gas |
| Aramco/Dow Chemical - Ras Tanura Integrated Refinery and Petrochemicals Complex | Saudi Arabia | Oil and Gas |
| Abu Dhabi Ports Company - Khalifa Port and Industrial Zone (KPIZ) | UAE | Infrastructure |
| Qatar Foundation - Sidra Medical and Research Center | Qatar | Real Estate |
| IGD - Gasco - Habshan 5 Gas Processing Plant | UAE | Oil and Gas |
| Emirates Aluminium (EMAL) - Smelter Complex - Phase 1 | UAE | Industry |
| Abu Dhabi DOT - Abu Dhabi Metro | UAE | Infrastructure |
Blogs
Items Related to Story
