Bahrain’s central bank foreign currency assets rose by almost $800 million in June from May, recovering further from pandemic lows, Reuters has reported quoting HSBC.

“However, the rise means that reserves have risen 50 per cent in the space of a year to their highest level since Q4 2015, continuing the recovery from Covid-19-era lows when holdings fell to just $770m,” Simon Williams, HSBC chief economist for Central and Eastern Europe, Middle East and Africa, said in a research note.

It was the third consecutive month-on-month rise in foreign currency assets, to BD1.95 billion ($5.17bn), he said.

“Subsequent to the June data, Bahrain repaid a $1.5bn Eurobond which could have required the authorities to tap reserves, but Bloomberg data also show there was a $1bn private placement that may have preserved liquidity,” Mr Williams said.

The rise in reserves reflects a strong current account performance, with eight straight quarterly surpluses notched since the second quarter of 2021 worth a cumulative $3.8bn, or 8pc of HSBC’s estimate for gross domestic product this year.

“The performance has been driven by higher oil earnings, but non-oil exports have also gained and services credits have risen as the tourism sector strengthened, buoyed by demand from Saudi Arabia,” he added.

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