Bahrain got first funds from GCC aid last year

Bahrain has received the first instalment of a $10 billion aid package pledged by its Gulf allies last year, its central bank governor told Bloomberg TV in an interview.

“This has been within the programme we have agreed. The first payment was last year and I think this year this will continue,” Rasheed Mohammed Al Maraj said in Davos.

He did not disclose the size of the first instalment.

Bahrain was expected to receive $2bn late last year, officials told Reuters in October, as part of a $10bn aid package that Saudi Arabia, Kuwait and the United Arab Emirates pledged to avoid the risk of a debt crisis in the island kingdom.

Bahrain’s currency, the dinar, is pegged to the U.S. dollar. Al Maraj reiterated the central bank’s commitment to supply the markets with foreign currency:

“We have been maintaining an adequate level of providing markets with whatever is the requirements in terms of trade and repatriation of capital, workers remittances.”

Bahrain is expected to raise external financing this year through U.S. dollar-denominated bonds, though at a slower pace than in previous years because it can now rely on financial support from its Gulf neighbours.

Al Maraj said parliament was now the budget and a decision on its future borrowing plans depended on the outcome of those discussions, but added that the targets “will be much lower than before.”