Bahrain Introduces Loan Relief and Liquidity Measures

Apr 14, 2026

70 min

Apr 14, 2026 06:30

Bahrain rolls out loan relief and liquidity boost to support economy

## Loan Relief Measures

Bahrain has announced a comprehensive package aimed at easing financial pressures on households and businesses. The Central Bank of Bahrain is allowing retail banks and financing companies to offer a three-month deferral on loan installments and credit card payments. This initiative covers both principal and interest, providing temporary relief to borrowers.

## Impact on Financial Stability

The measures are part of a broader strategy to maintain financial stability and support economic activity. Banks have been given the flexibility to manage affected loans without immediate reclassification, helping to prevent a rise in non-performing loans. With total lending in Bahrain at approximately BHD11.3 billion, the relief is expected to benefit a significant portion of the economy.

## Liquidity Support

In addition to loan relief, the central bank has introduced funding measures to ensure banks have adequate liquidity. For six months, banks can access unlimited Bahraini dinar liquidity against eligible collateral. The repo facility has been extended to three months, and reserve requirements have been reduced from 5.0% to 3.5%. Key liquidity ratios have also been eased, freeing up funds for the real economy.

## Ongoing Monitoring

The Central Bank of Bahrain assures that the financial system remains stable, with banks maintaining strong capital and liquidity buffers. The bank will continue to monitor the situation and is prepared to implement further measures if necessary to ensure monetary stability and uninterrupted financial services.

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