DUBAI (Reuters) – Bahrain’s central bank said on Sunday it had introduced a repurchase instrument in an effort to help local banks manage their liquidity.
The interbank repurchase instrument covers the government’s conventional securities denominated in Bahraini dinars, the regulator said in a statement.
The move was “part of the ongoing efforts towards the development of the banking sector and promoting liquidity management for conventional retail banks,” it said.
“This tool will help conventional retail banks borrow from the local market at lower interest rates and with the guarantee of the securities as a collateral. This tool will also allow for investing excess liquidity at a lower risk,” the central bank added.