Central Bank of Bahrain raises key interest rate by 25 basis points

Central Bank of Bahrain raises key interest rate by 25 basis points

The Central Bank of Bahrain (CBB) has raised its key policy interest rate by a quarter of a percentage point yesterday.

Bahrain’s banking regulator said the policy interest rate on the one-week deposit facility is raised from 6pc to 6.25pc.

The CBB has also decided to raise the overnight deposit rate from 5.75pc to 6pc, while maintaining the four-week deposit rate at 6.75pc and the lending rates at 7pc.

Adding that it continues to monitor global and local market developments closely, the CBB said it would take any further necessary actions to maintain monetary and financial stability in the kingdom.

The decision follows the US Federal Reserve raising interest rates by 25 basis points, citing still elevated inflation as a rationale for what is now the highest US central bank policy rate in 16 years.

The rate hike, the Fed’s 11th in its last 12 meetings, set the benchmark overnight interest rate in the 5.25pc-5.50pc range, and the accompanying policy statement left the door open to another increase.

“The (Federal Open Market) Committee will continue to assess additional information and its implications for monetary policy,” the Fed said in language that was little changed from its June statement and left the central bank’s policy options open