The UAE, Saudi Arabia and Kuwait are set to announce a programme designed to support economic reforms and fiscal stability in Bahrain, the three countries said in a statement on Tuesday.
Earlier this week, the Bahraini dinar, whose peg to the dollar has been effectively unchanged since 1980, fell for a fourth day in the onshore market to its weakest level since 1988, while the cost of insuring its debt against default for five years jumped 170 basis points – the most since records began in 2008 – to 609.
The International Monetary Fund expects the island kingdom’s debt to exceed 100 percent of economic output in 2019.
In the statement, the three countries said they were in talks “to confirm their commitment to consider all options to support the kingdom of Bahrain and to finalise an integrated program that will soon be announced to enable the kingdom of Bahrain to support its economic reforms and fiscal stability.”
In a statement reported by the state-run Bahrain News Agency, Bahraini Finance Minister Sheikh Ahmed bin Mohammed Al Khalifa confirmed the new programme, and said that “such initiatives represent the strength of long-standing ties between Bahrain and all three countries, which are underpinned by a shared commitment to achieve strategic goals and interests.”
Bahrain has projected a state budget gap of $3.5 billion in 2018 and, according to IMF estimates, is the only Gulf oil producer that needs prices to climb above $100 percent in order to balance its budget.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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