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Bahrain central bank cuts key rate by 25 basis points
Source: BI-ME , Author: BI-ME staff
Posted: Tue September 15, 2009 5:33 pm
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BAHRAIN. The Central Bank of Bahrain (CBB) has announced a cut in its key policy interest rate by 25 basis points with immediate effect.

The CBB’'s rate on the one-week deposit facility will be reduced to 0.505 from 0.75%, the bank said in a statement.

The CBB has decided to keep the rate on the overnight deposit facility at 0.25% but has reduced the repo and lending rates to 2.255 from 2.75%.

The CBB’s lending standing facilities remain available for banks at their initiative to assist them to meet their liquidity needs, the statement added.

The CBB has also reviewed terms for the FX-swap facility which allows eligible counterparties to offer US dollars against Bahraini dinars for one-week maturity. 

The facility was initially introduced to help ensure the smooth and effective functioning of the money markets in Bahrain, an objective which has been successfully achieved.

The CBB has decided it will now offer an additional USD/BHD FX-swap facility with a one-month maturity. 

“The adjustment to the deposit and lending rates as well as terms for FX-swap facility represents a continuation of measures taken by the CBB to ensure the smooth functioning of the money markets in Bahrain,” the statement said.

MIDDLE EAST BUSINESS COMMENT & ANALYSIS

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UAE. Given the recent developments in Saudi Arabia and India, there is now a greater level of hope that the TRA and RIM will reach an agreement about the manner in which BB Messenger services are provided.
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