Bahrain Mirror: The Central Bank of Bahrain called on the Parliament to review a parliamentary law aimed at imposing fees on remittances.

The imposition of fees is a form of control over the free flow of capital that would restrict financial transactions, as it directly contradicts the policy of the Kingdom of Bahrain as a free economy open to global trade and unrestricted investment, whether administratively or by the imposition of fees.

The bank stressed that the imposition of fees on funds transferred abroad by foreign workers will be detrimental to this workforce, who are mostly paid low salaries, which will create illegal channels for the transfer of those funds, outside the official domain currently in place that corresponds to the obligations of the Government of Bahrain in terms of combating money laundering and terrorist financing, it explained.

"Due to the financial situations in the countries of the region as a result of the collapse of oil prices, the currencies of the region's countries are constantly exposed to speculations by hedge funds and currency traders because of the expectation of a decline in financial reserves, and therefore any actions that affect the essence of monetary policy or restriction of the flow of funds will have a direct negative impact on the official exchange rate, exposing the country to the risk of increasing speculation on the dinar, at a time when we need to stabilize these indicators to confirm confidence in financial transactions in dinars, especially with regards to depositors in local banks," the Central Bank added.

It is worth to note that the parliamentary proposal provides for the imposition of fees on cash transfers abroad at a minimum amount of one dinar, and ten dinars maximum.

Arabic Version