Bahrain Mirror: Bloomberg economic news agency said that Bahrain and its allies from the Gulf states are making progress in the aid program to help Bahrain reform its financial situation and avoid a devaluation that could trouble neighboring markets.

The agency said that officials from Bahrain, Saudi Arabia, the United Arab Emirates and Kuwait discussed a multi-year program that includes spending cuts and measures for increasing non-oil revenues, including value-added tax entry, according to five persons who had information on the discussions.

Information said that the Arab Monetary Fund, an IMF similar organization based in Abu Dhabi, has been involved in the discussions and may help monitor the implementation of the program.

Investors fear that without help in backing the low foreign exchange reserves and reducing rising debt, the tiny kingdom will have to abandon its peg to the dollar.

State bonds were the worst hit in the Gulf this year as investors were concerned that Bahrain's implicit support from Saudi Arabia, Kuwait and the United Arab Emirates would not materialize, the agency added.

Arabic Version