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Thu 10 Mar 2011 03:10 PM

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Bahrain banking normal, bond issue still on, says Central Bank

Central Bank governor Rasheed Al Maraj says Bahrain will still push forward with a planned $1bn bond issue

Bahrain banking normal, bond issue still on, says Central Bank
NORMAL OPERATIONS Al Maraj said Bahraini banks were operating normal amid ongoing demonstrations in the country. (Bloomberg Images)

Bahrain's banks are operating as usual and there has been no adverse impact from the protests that have gripped the kingdom now for nearly a month, the Gulf Arab country's central bank governor said on Thursday.

Echoing comments he made two weeks ago, Bahrain Central Bank governor Rasheed Al Maraj said on the sidelines of a regional central bankers' meeting that the country would still push forward with a planned $1bn bond issue.

"We have not decided on the timing yet. The plan is still on but we will have to enter the market at the right time," Maraj told reporters.

He added that Bahrain had not yet mandated banks for its planned $1bn bond issue.

"This is part of our budgetary process," Maraj said.

Bahrain is facing rising expenditures on social items such as subsidies and government houses in a bid to counter protests by its disgruntled Shi'ite population.

Protesters emboldened by popular uprisings in Tunisia and Egypt took to the streets a month ago, and before the situation settled into a bloodless impasse, seven people were killed during an initial crackdown.

Maraj also said Bahraini banks were operating normal as thousands of protesters occupy a central square in Manama and launch almost daily, but peaceful, marches to government buildings.

But bankers and analysts say Bahraini banks will be impacted by the impact as international banks could cut financing lines and local companies in particular in the tourism and retail sector could be forced into debt restructurings.

Rating agencies have lowered Bahrain's sovereign ratings as well as their ratings on some Bahraini banks due to the unrest.

Retail lender Bahrain Islamic Bank postponed a planned $143m rights issue planned for this week.

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