8th June 2021

NBB and Standard Chartered Bank Execute the First Conventional Interbank Repurchase Transaction Denominated in Bahraini Dinars

Manama, Bahrain: Following the Central Bank of Bahrain’s (CBB) launch of the interbank repo product for the Government of Bahrain’s conventional securities, The National Bank of Bahrain (NBB), in conjunction with Standard Chartered Bank, executed the first conventional interbank repurchase (Repo) transaction denominated in Bahraini Dinars.

 

This comes as a part of the CBB’s ongoing efforts towards the development of the banking sector, promoting liquidity management and building a liquid and reliable secondary market curve for conventional retail banks, which was entrusted to the Bahrain Association of Banks (BAB), to guide and ensure implementation within the banking arena in Bahrain.

 

NBB and Standard Chartered have taken the lead in developing the repo market, and have executed the first deal of this kind ensuring that it meets international standards. This marks an important achievement and a milestone for the Kingdom of Bahrain, as repos are considered an integral factor in developed money and capital markets.

 

The CBB has been a longstanding advocate of the development of the Repo Market, providing the custody and collateral management infrastructure required while facilitating early discussions among Banks. BAB, on the other hand, has been instrumental in guiding discussion and encouraging implementation among its members.

 

Hisham Al Kurdi, Group Chief Executive - Corporate & Institutional Investment Banking at the National Bank of Bahrain, said: “We are pleased to be part of this key initiative that will ultimately work towards advancing money and capital markets in Bahrain. Repurchase transactions enhance bank liquidity management and contribute to the development of the secondary markets in securities denominated in Bahraini Dinars, aligning us with developed international markets and maintaining the Kingdom of Bahrain pioneering capital market position in the region.”

 

Roomi Siddiqui, Executive Director, Head Treasury Markets MENA Sub Region for Standard Chartered, said: “In addition to the development of local markets, the initiation of the Repo market would provide investors in the Government of Bahrain debt securities denominated in Bahraini Dinars with greater access to liquidity and leverage.”

 

The Introduction of Interbank repo as one of the mainstream products will leverage further movement of liquidity within banks and increase activity in interbank transactions. This step will not only provide an additional source of liquidity to the market, but will also enable funding to be cost effective. In addition to helping build a secondary market yield curve, it will also address the long-term funding requirements of the market with a much-reduced credit risk compared to conventional funding.

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