(AhlulBayt News Agency) - Manama has reportedly asked its Persian Gulf neighbors, Saudi Arabia and the United Arab Emirates, for financial assistance.
Bloomberg cited three people with knowledge of the ongoing talks between the member states of the Persian Gulf Cooperation Council (PGCC), who say that Bahrain is seeking to replenish its foreign-exchange reserves and avert a currency devaluation.
One of the Bloomberg sources said that Kuwait was also asked to help.
The monarchy in Manama was apparently told to do more to bring its finances under control in return for the money.
Bahrain, which was recently classified as the most vulnerable oil exporter, has been hard hit by a slump in global commodity prices.
In late August, the International Monetary Fund (IMF) repeated earlier warnings to Manama to “urgently” stabilize its state finances.
The IMF stressed that Bahrain needed to raise its market interest rates to protect its currency, which is pegged to the U.S. dollar.
“Without aid or a recovery in oil revenue, authorities may struggle to keep the currency’s peg to the U.S. dollar,” Bloomberg reported on Wednesday.
Bahrain’s deficit for next year is expected to reach a whopping USD 4.2 billion and the IMF estimates that the country needs oil prices at USD 99 a barrel to balance its budget. Brent crude prices are currently at just over USD 60 a barrel.