Central Bank of Bahrain (CBB) Governor Rasheed Al Maraj has said that the financial sector in Bahrain has not been affected by the current global monetary crisis and that liquidity in Bahraini dinars remained “normal”. Earlier he held meeting with banks in the country to discuss the current global financial crisis. All commercial and investment banks operating in Bahrain enjoy strong monetary solvency and abundance of liquidity far more than needed. In a statement to the press, Al Maraj said bahrain banking sectors immunity from the crisis was owed to strict control policies adopted by monetary authorities on various banks. Daily reports on the financial status are being submitted to CBB which required transparent disclosing of truths to citizens through fast submission of financial results for the third quarter of this year, he added. Despite the grave impact of the crisis on the global financial sector, which brought about complete closure of credit markets and consequently will increase economic regress rates, Bahrain's banking sector and economy remained safe from any such repercussions, he noted. Bahrain still enjoys a great capability to fund major local and regional projects thanks to bank solvency and liquidity surplus, Al Maraj said. However, regional enterprises relying on foreign funds can be affected in the future, he pointed out. Financial results disclosed by many bahraini banks this week represent a sound index of not being affected by the crisis, he said, predicting continuity of such good results till the end of the current fiscal year. A 45-day deadline is generally given to banks by Cbb to reveal their quarterly results and 90 days for their annual results. bahrain banks still havent witnessed any unusual withdrawal of deposits thanks to a more than one- decade-old banking law stipulating full guarantee of clients deposits, al maraj revealed. Concerning real estate funding, he said the final phases of the consultative process with banks regarding issuance of legislation to govern real estate funding and protect banks from any instability of the sector. Moreover, on inflation, Al Maraj asserted Bahrain's leading position in the Gulf in fighting it with 3.4 percent inflation rate while the percentage has increased threefold in many other Gulf countries reaching 12 percent. A recent slump in oil prices and primary commodities is expected to decrease inflation rates in Bahrain and the whole region soon, he said, and cautioned against a potential rise in funding expenses which might negatively affect the global economy. Bahrain will not follow the policy of cutting down the gap between the interest rate on deposits and the interest rate on loans due to Bahrain's growing economy, he said. Property market booming Healthy capital inflows, high liquidity, a growing population, rising demand for property, and a growth in credit facilities are creating a boom in Bahrain with real estate as the prime engine of growth. As much as $15 billion worth of projects are underway and although 90 percent of those investing in property in Bahrain are local there is increasing interest from non-nationals especially from the Gulf region. The government's liberal policies and an expatriate friendly investment environment will help to ensure the boom continues, said A. Majeed Al Gassab, president of the Bahrain Society of Engineers which is organizing the Bahrain International Property Exhibition 2008 that will open on Oct. 23 at the Bahrain International Exhibition Centre. He pointed out that Bahrain was the first nation in the region to grant property buyers the right of freehold ownership. He is optimistic that Bahrain in particular and the Gulf region in general, will more or less remain unaffected by the current global financial turmoil. “The region is today considered a safe haven for international investors seeking to shield themselves from the global financial downswing in the equities markets and escape the recessionary trend in the major world economies,” he said. Analysts agreed. A spokesman for real estate advisory firm DTZ Bahrain, said the country can expect significant growth in the property sector up until at least 2021. “Growth is expected across the residential and commercial sectors with the kingdom remaining a highly competitive market ripe for investment across both,” he added. Organizers expect to exceed last year's record when over $38 billion worth of real estate assets from 70 companies were on show to over 12,000 visitors. “The strong interest in this event is a reflection of the consistent growth of the real estate sector in the gulf region which has risen in stature as an international property market capable of attracting investments from across the globe,” said Jameel Khalaf Al Alawi, director of conferences at the BSE. __
