By Frederik Richter
Governor says banks have enough liquidity, able to fund projects despite global crisis.
Bahrain's banks have more than enough liquidity, and the regional banking centre is able to fund projects despite the global financial crisis, Bahrain's central bank governor was quoted as saying.
"Bahrain still enjoys a great capability to fund major local and regional projects thanks to bank solvency and liquidity surplus," the official news agency BNA on Friday quoted Rasheed Al-Maraj as saying. "However, regional enterprises relying on foreign funds can be affected in the future."
Al-Maraj also said in a statement to newspaper editors that the Gulf Arab state was not affected by the global turmoil and its banks "enjoy strong monetary solvency and abundance of liquidity far more than needed", BNA said.
"Bahrain banks still haven't witnessed any unusual withdrawal of deposits thanks to a more than one-decade-old banking law stipulating full guarantee of clients' deposits," Al-Maraj added.
Bahrain, home to more than 100 banks and financial houses with combined assets of about $250 billion, is a regional centre for project finance as Gulf Arab states invest part of their windfall oil revenue on massive real estate and development projects.
"Al-Maraj affirmed Bahrain's leading position in the Gulf in fighting [inflation], with a 3.4 percent inflation rate while the percentage has increased three-fold in many other Gulf countries, reaching 12 percent," BNA reported.
Al-Maraj said recent declines in oil and commodity prices would help ease inflation in the small island kingdom and the Gulf region. (Reuters)