Money supply rises in Bahrain, falls in Oman

Bahrain and Oman yesterday released money supply figures with the former reporting acceleration and latter announcing decline in money supply growth.

Growth in Bahraini money supply accelerated to 36.6 per cent in June from its slowest pace in eight months a month earlier, as money held in time and savings deposits grew more quickly, data showed.

M3, the broadest measure of money circulating in the smallest Gulf Arab economy, rose to 7.62 billion dinars (Dh74.17bn) on June 30 from 5.58bn dinars a year earlier, the central bank said in a report on its website.

Money supply, an indicator of future inflation, advanced 32.2 per cent in May, its slowest pace of annual growth since September.

In June, money held in time and savings deposits grew 41.6 per cent to 4.38bn dinars, compared with a rise of 35 per cent in May, the data showed.

Funds held in demand deposits advanced 34 per cent to 1.93bn dinars in June.

Bahrain has the region's lowest inflation rate of 3.1 per cent in June, according to official data.

Net foreign assets held by Bahrain's central bank surged 45.5 per cent to 1.63bn dinars in June, slowing 4.1 per cent from a month earlier, the central bank added.

In Oman, Growth in money supply eased for a second month to 34 per cent in June, its slowest annual rise in seven months, official data showed.

M2, the broadest measure of money circulating the Omani economy, hit 7.024 billion rials (Dh66.9bn) on June 30 compared with 5.24bn rials a year earlier, the Ministry of National Economy said in a report on its website on Sunday.

That was the slowest rise in annual money supply since November. Oman money supply grew 40.5 per cent in February, the fastest pace since at least 2004.

Money supply growth is an indicator of future inflation, which in Oman jumped to a record near 14 per cent in June as food costs surged.

The central bank's foreign assets and gold holdings grew 45.3 per cent in June to 3.86bn rials.