Manama: The Kingdom of Bahrain’s retail deposits continued to grow reaching $45.1 billion in October 2017, increasing by almost 4.5% compared to the same period in 2016.
The Central Bank of Bahrain (CBB) on Saturday said that Bahrain remains committed to maintaining a fixed exchange rate regime with the US Dollar.
“This policy has provided a strong anchor for monetary policy throughout the years and helped in creating a stable business environment and financial stability. The International Monetary Fund also endorsed this policy in its Article IV review of the economy of Bahrain.”
Referring to the Standard and Poor’s rating of the Kingdom of Bahrain, the CBB said that the Kingdom recorded economic growth of 3.4% in the first half of 2017 compared to 3.2% in 2016.
The non-oil sector also posted a growth rate of 4.7% in the first half of 2017 compared to 4.0% in 2016. This is a remarkable achievement in light of lower oil prices and subdued regional growth, reflecting the effectiveness of the Government’s initiatives in gradually adjusting the fiscal imbalances and the efforts in enhancing the overall legal, investment and business environment.
The foreign direct investments also continued to grow reaching USD 695 million as of October 2017, compared to USD 280 million in 2016, showing the resilience of the national economy.
Despite the lower contribution of oil sector in Bahrain’s economy to 20%, oil revenue is still the main source of income in the state budget, which provides continuous foreign exchange revenues that can meet the cost of imports, financial transfers and remittances.
Bahrain’s financial sector has performed well over the years and the recent results of the banking sector reflect its strong liquidity and capitalization. The capital adequacy ratio of the banking sector reached 19.8% as of September 2017, well above the regulatory requirement.
Despite the current low oil price, the economy continues to grow with low inflation reflecting the Government’s ongoing initiatives to foster sound fiscal and economic policies. Notwithstanding the rating agency’s action, the economic situation in Bahrain remains robust supported by a strong banking system.