This was stated by the Central Bank of Bahrain Governor Rasheed Mohammed Al Maraj while talking to reporters on the sidelines of the GCC Central Banks’ Committee meeting held in Bahrain on Wednesday and said the inflation likely to be 1.5% this year.
Factually speaking, the Governor said, inflation in the Kingdom has always been remained very low and only fuelled by the external prices especially the food which the country has to import from other countries.
“We at the central bank always remain vigilant about the inflation and this year we can’t see it beyond 1% to 1.5%.
The Central Bank Governor also said that he was expecting economic growth at four per cent against 3.9% last year.
Talking about the baking and financial sector, Al Maraj said that the year 2012 was good and the 2013 was looking even healthier.
Referring to a question he ruled out the change Bahraini Dinar’s peg with the US dollar and said overall banking sectors earning were up compared with the last year. “Given the present situation and growth direction we don’t see much change in this sector towards the end of the year,” Al Maraj added.
“Our current exchange rate policy has served us well and we have no intention of doing anything else,” he said.
About GCC Central Banks meeting the Governor said that the participating delegates from the GCC have identified key areas in line with safeguarding the ownership, complexity and competitiveness.
Talking about the consolidation of the banking sector he said that the talks were in progress for further consolidation in the banking sector which according to him would serve as a good move.
Al Maraj categorically stated that there was no lack of liquidity in the banking system to meet the Basle III requirements.
Bahrain being a hub of the Islamic banks, he said, needs to be more careful to come up with more sukuk issues to tap the huge potential in this segment.
The CBB, he added, will continue to be a promoter of Islamic banking and finance and has been working with other Islamic finance centres both Europe and the UK.
“The response, willingness and appetite in the market for Shari’ah complaint products are very encouraging. Bahrain wants to see the Islamic finance to be part of the global banking system.”