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Cash situation stable.

MANAMA: Bahrain has not seen any major capital flight following unrest and a planned $1 billion (BD377 million) bond issue will go ahead when costs are reasonable, Central Bank of Bahrain Governor Rasheed Al Maraj said yesterday.

"So far there is no indication of a major capital flight from the island," he said.

Major capital outflows could put the country's currency peg to the US dollar under pressure and become a challenge for the bank, whose foreign currency reserves are limited.

Before protests erupted, the government had planned to issue the bond by March-end to cover a rising fiscal deficit spurred by higher expenditures on social items.

Copyright 2011 Gulf Daily News

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Feb 27, 2011
Words:120
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