The Central Bank of Bahrain (CBB) has initiated the establishment of a money market forum, aimed at providing a platform for discussion on market development and structural issues and enhancing transparency in the BD money markets.
The Bahrain Money Market Forum (BMMF) comprises six CBB officials and representatives of nine banks, which are most active in the BD money market. The banks comprise locally-incorporated and foreign institutions, both conventional and Islamic.
“The CBB intends to enhance its operational framework for the money market, to make it more market-oriented and transparent,” said Dr Abdul Rahman Saif, Executive Director, Banking Operations, at the CBB, who is the Chairman of the BMMF.
The CBB has conducted a study with the aim of enhancing monetary operations and develop the BD money market, he said.
“Changes planned to be introduced include the type of instruments offered by the CBB and their pricing mechanism. One of the early changes will be the consolidation of CBB’s treasury and foreign exchange (forex) operation, which takes effect from 1 December 2006,” said Dr Saif.
With the implementation of all changes, the new consistent market-oriented framework should contribute to increased money market activity and enhance the banking sector’s capacity to manage liquidity.
“In light of the expected changes, the establishment of the BMMF will provide a channel of discussion and exchange of views between the CBB and the industry,” said Dr Saif.
“The CBB recognizes the value of markets and the value of public-private partnership in maintaining active, transparent and stable markets.”
The first meeting of the BMMF was held on 28 November 2006. It was attended by CBB officials and representatives of the member banks.
During the meeting, CBB officials briefed the industry representatives about CBB’s vision for banking operations, the planned changes and their timing.
The banks represented on the BMMF are National Bank of Bahrain, Bank of Bahrain & Kuwait, Ahli United Bank, BNP Paribas, Calyon Bank, Kuwait Finance House, Bahrain Islamic Bank, HSBC and Standard Chartered Bank.
