March 12, 2020 / 3:00 PM / 22 days ago

UPDATE 1-Bahrain central bank cuts overnight lending rate to 2.45%

(Adds central bank comments on providing liquidity to banks)

DUBAI, March 12 (Reuters) - Bahrain’s central bank cut its overnight lending rate to 2.45% from 4% “in light of the recent global developments,” it said in a statement on Thursday.

“The CBB continues to monitor global and local market developments closely in order to take any further necessary actions,” it said, adding it cut the rate to “to ensure the smooth functioning of the money markets in Bahrain.”

Bahrain’s central bank governor said on Twitter the bank was ready to provide the required liquidity to banks as needed.

Bahrain, a small Gulf oil producer, was bailed out by Saudi Arabia, the United Arab Emirates and Kuwait with $10 billion in aid pledged in 2018 after a prolonged period of lower oil prices pushed its public debt to nearly 93% of annual economic output.

Analysts have said a recent plunge in oil prices is expected to hit smaller Gulf economies such as Bahrain and Oman particularly hard. This adds to economic uncertainty due to the spread of coronavirus.

Bahrain has reported 195 infections, with 77 new cases reported on Wednesday among citizens evacuated from Iran.

Reporting by Yousef Saba Editing by Davide Barbuscia and Mark Heinrich

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