CBB Volume 1: Contents

Central Bank of Bahrain Volume 1—Conventional Banks
Part A
Business Standards
BC Business and Market Conduct
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Spot transactionsG and outrights:

(a) Original agreed upon value date for identical currency sold and purchased: extension of value date to next possible value date for both currencies; and
(b) Original agreed upon value date for non-identical currency sold and purchased (for instance, Friday for US Dollars and Saturday for Gulf Currencies): as unexpected banking closing days for non-Middle Eastern currencies are unlikely - value of non-Gulf currencies unchanged and value of Gulf currency on the next working day, adjusting spot or outright rate taking into account interest rate difference between the two currencies.
For pure outrights it would be advisable to adopt same system as for swaps; however, implied swap difference is not visible or identical for both parties.
•   It can be assumed that, if the above rule would cause substantial losses for one party, dealers will re-negotiate a new rate, on a case-by case basis; if no agreement can be reached, the CBB - as final arbitrator - will fix the interest rates, prevailing at that time, which will be used to calculate the points difference, with which the outright rate will be adjusted.

It is possible that payment instructions for counter-currency are already sent out and cannot be cancelled; in that case the paying party should be entitled to the proceeds of the unexpected use of funds by the receiving party.

Amended: April 2011
October 07
(2 Versions)
Oct 1 2007 - Mar 31 2011Apr 1 2011 onwards
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