CBO will not blindly follow US Fed’s rate decision

MUSCAT: The Central Bank of Oman (CBO) won’t automatically imitate last week’s interest rate hike by the US Federal Reserve, Hamood Sangour al Zadjali, (pictured) Executive President, said yesterday. Oman is the only member of the six-nation Gulf Cooperation Council not to announce an official interest rate rise in the wake of the Fed’s 0.25 percentage point increase. The Omani central bank will monitor interest rates offered by local banks and will not “blindly follow the Federal Reserve’s decision”, Al Zadjali said.  “Even though the Omani rial is pegged to the US dollar, the economic cycle in the US is different from the local economic cycle.”
Al Zadjali added, “Oman has its independent policies with regards to this issue. The situation needs to be deeply and carefully studied before any decisions, keeping the national economy’s interest in mind.” The central bank’s overnight repurchase rate, which is determined by a formula based on the London interbank offered rate, has been edging up in the last few months from the 1.00 percent level where it was for years. The rate hit 1.195 per cent last week. — Reuters