Monetary Stability Continues as Bahrain's Money Supply Hits BD 16.8 Billion

The Central Bank of Bahrain (CBB) held its third board meeting of the year on Sunday, June 15, 2025, led by Mr. Hassan Khalifa Al Jalahma, Chairman of the Board.

During the session, board members reviewed a number of key issues on the agenda. Chief Executive Mr. Khalid Ibrahim Humaidan provided an overview of the CBB’s latest achievements and priorities. The board also discussed licensing updates, policy progress, and other operational highlights from the first part of the year.

Positive Growth in Money Supply and Banking Activity

The meeting shed light on the steady rise in Bahrain’s monetary indicators. As of April 2025, the broad money supply (M3) reached BD 16.8 billion, showing a healthy increase of BD 5.2 billion compared to April 2024.

Private sector deposits at retail banks also grew to BD 14.4 billion, a 3.5% rise year-on-year. Credit facilities extended to Bahrain-based economic sectors totaled BD 12.4 billion, up 1.8%, with 43.3% going to businesses and 48.9% to individuals.

The total balance sheet for Bahrain’s banking sector (including retail and wholesale banks) stood at USD 244.7 billion, an increase of 2.3% from the same period last year.

Surge in Digital Transactions

Point-of-sale (POS) transactions saw a significant uptick. In April 2025, a total of 21.5 million transactions were recorded, with 77.6% made via contactless cards—marking a 28.5% increase in transaction volume. The total value of these operations was BD 428.2 million, up 17.3%, with contactless payments accounting for more than half of the value.

Stable Capital Adequacy Amid Sector Variations

The capital adequacy ratio for the banking sector was 20.6% at the end of Q1 2025, slightly lower than 22.2% a year earlier. The breakdown by bank type revealed:

• Traditional retail banks: 29.4%

• Traditional wholesale banks: 16.6%

• Islamic retail banks: 23.8%

• Islamic wholesale banks: 21.1%

These figures reflect a well-capitalized banking environment with adequate buffers in place.

Investment Funds See Mixed Results

As of March 2025, the total number of investment funds registered with the CBB rose to 1,737, compared to 1,699 in March 2024. However, the total assets under management dropped slightly to USD 11.27 billion, a 2.4% year-on-year decline.

• Local funds saw a 3.8% decrease in asset value.

• Foreign funds experienced a 1.5% drop.

• Islamic investment funds, however, posted a 15% increase, rising from USD 1.74 billion to USD 2 billion.

The data reflects shifting investor sentiment and highlights growing interest in Islamic finance.