MANAMA: Net foreign assets at Bahrain’s central bank, an indication of its ability to defend its currency against market pressure, rebounded in June, the central bank said yesterday.
The assets rose to BD820.6 million in June from BD671.1m in May.
However, net foreign assets at Bahraini retail banks fell in June, to minus BD1.26 billion from minus BD1.20bn. Foreign assets have been under pressure as Bahrain runs fiscal and current account deficits fuelled by low oil prices. The central bank did not give a reason for the rebound in its assets during June.
Bankers say the central bank sometimes uses swap agreements or other deals to obtain foreign currency as needed from retail banks, bolstering its reserves.
Bahrain made a private placement of $500m of government development bonds to a regional institution in April, according to Jean-Michel Saliba, regional economist at Bank of America Merrill Lynch.
In late June, Saudi Arabia, the UAE and Kuwait said they would soon announce a formal, public assistance programme to support the country’s fiscal stability and economic reforms.