BAB call to boost interbank rate

MANAMA: The Bahrain Association of Banks (BAB) has called for strengthening the interest rate on Bahraini dinar, known as the Bahrain Interbank Offered Rate (BHIBOR), regionally and internationally, to become a reference for financial transactions in Bahrain and the region, which exceed billions of dollars a day.

A statement yesterday referred to the call by BAB chairman Adnan Yousif to promote the benchmark interest rate on Bahraini dinar after Britain announced its intention to abandon the London Interbank Offered Rate (LIBOR_ by the end of 2021.

The association said it calls for concerted efforts of all national banks in co-operation with regulators, led by the Central Bank of Bahrain (CBB) and the Economic Development Board to achieve this goal.

The main objective in revising the management process of BHIBOR is to increase the efficiency of trading in Bahraini dinars both regionally and globally and to ensure consistency with Bahrain’s Economic Vision 2030 to promote the country as a leading regional financial centre.

This will help attract money flows through Bahrain’s banking system and increase liquidity in the sector.

Together with the CBB and Thomson Reuters, the new process for managing the BHIBOR was officially launched in 2011.

At the request of the CBB, the BAB started a project to take over management and monitoring of the BHIBOR, which is used by banks when they lend money to each other.

BHIBOR represents the average offered interest rate from a panel of seven commercial banks for Bahraini dinar lending on the interbank market.

It is a daily reference rate based on the interest at which banks borrow unsecured funds from other banks in the local wholesale banking market.

Source: http://www.gdnonline.com/Details/249714/BAB-call-to-boost-interbank-rate