The cost of insuring Bahrain's debt against default has risen to a six month high ahead of elections on Sunday.
Bahrain default risk rises to highest since unrest
Bahrain's default risk has risen to its highest since the height of political unrest six months ago, against a backdrop of concerns that tensions may reignite ahead of a forthcoming election next week.
The cost of insuring the country's debt against default rose to 328 yesterday, according to five year credit default swaps from data provider CMA, as cited by Bloomberg News.
The island kingdom was rocked by protests in February and March, during which more than 30 people died and which left the economy reeling. Since then the country's fiscal position has become increasingly perilous as foreign reserves have dwindled and banking and tourism activity declined.
The cost of insuring the country's debt had been falling after reaching a peak of 359 on March 15 at the height of the unrest.
Parliamentary elections are due to take place on Sunday. The same day opposition supporters are vowing to hold a mass demonstration in Manama.
Standard Chartered wrote in a report this week it saw "little value" in Bahraini bonds.
"Bahraini issuers, both sovereign and corporate, will find it difficult to tap international markets in the current environment," Philippe Dauba-Pantanacce and Victor Lohle, wrote in the report.