Central Bank of Bahrain cuts interest rate by 25 basis points

The CBB has decided to cut its key policy interest rate by 25 basis points.
Effective immediately, the CBB's rate on the one-week deposit facility is 0.50% from 0.75% previously.

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 2.25% from 2.75% previously. The CBB's lending standing facilities remain available for banks at their initiative to assist them to meet their liquidity needs.

The CBB has also reviewed its terms for the FX-swap facility which allows eligible counterparties to offer US Dollars against Bahraini Dinars for 1-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 1-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.