Money supply in Bahrain, an indicator of future inflation, grew 37.7 per cent in November, its fastest pace in at least six years, the central bank said on Tuesday.
M3, the broadest measure of money circulating in Bahrain, jumped to BHD6.36 billion (Dh62.1bn) on November 30, compared with BHD4.62 billion a year earlier, the central bank said in a statement.
M3 growth was the fastest since at least January 2001, central bank data showed. Money supply rose 32.8 per cent in October.
The central bank's net foreign assets rose 61.3 percent to a 10-year high of BHD1.28 billion, the data showed.
Money supply growth, driven by oil prices at record highs near $100 a barrel, is fuelling inflation across the Gulf region, while central banks shadow US interest rates to deter bets on the appreciation of their dollar-pegged currencies.
The pegs force Gulf central banks to track US monetary policy at a time when inflation is at decade highs across much of the region and the Federal Reserve is cutting rates to contain the fallout from a mortgage market crisis.
A Bahraini ministerial affairs committee met on Monday to study ways to combat a rise in the cost of living in the kingdom.
The Bahrain central bank statement did not contain inflation data. A Reuters poll in December showed inflation would ease to 3.1 per cent in 2008 from 3.2 per cent in 2007. (Reuters)
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