Mubasher: Standard and Poor's Global Ratings lowered Bahrain’s long-term foreign and local currency sovereign credit ratings to ‘B+’ from ‘BB-’, with a stable outlook, after the Central Bank of Bahrain reaffirmed the country’s currency peg to the US dollar.
S&P also noted that the rating cut was due to weak external liquidity and increasing financial risk due to more limited access to international capital markets, according to a report issued on Friday.
The Central Bank of Bahrain said in a statement on Saturday that the kingdom remains committed to maintaining a fixed rate regime with the US dollar for its dinar currency, adding that the International Monetary Fund (IMF) has endorsed this policy.
Despite the current low oil price, the economy continues to grow with low inflation reflecting the Government’s ongoing initiatives to foster sound fiscal and economic policies, S&P added.
“Notwithstanding the rating agency’s action, the economic situation in Bahrain remains robust supported by a strong banking system,” it added.
