Manama: S&P Global Ratings affirmed its ‘B+/B’ long- and short-term foreign and local currency sovereign credit ratings on Bahrain. The outlook is stable. The S&P says the transfer and convertibility assessment on Bahrain remains at ‘BB-‘.
The stable outlook reflects the balance between the risk that the central bank would be unable to meet a surge in demand for foreign currency over the next 12 months and potential financial support from neighboring sovereigns, says S&P.
“We would raise the ratings if Bahrain’s net external asset position improves, perhaps due to a significant inflow of foreign currency, or the government undertakes additional steps to improve its public finance position in order to slow or reverse further increases in government debt,” adds S&P.
“We would lower the ratings if fiscal and external pressures intensify, the coverage of external liabilities by liquid external assets falls more sharply than expected, or we reassess our assumption that support for Bahrain’s exchange rate arrangement from neighboring sovereigns would be forthcoming.”
