CBO’S CAPITAL RAISED FROM RO 760 MILLION TO RO 1 BILLION
By Samuel Kutty — MUSCAT: March 22 – The foreign exchange reserves in the balance sheet of Central Bank of Oman (CBO) continue to remain healthy. “The bank maintains enough foreign reserves and these help maintain monetary stability in the country,” said Hamoud bin Sangour al Zadjali, CBO Executive President. According to him, the monetary reserves at the apex bank are satisfactory and enough to cover the Omani rial, hence there is no question of depreciation of the currency.
Referring to the recent decision to raise CBO’s capital from RO 760 million to RO 1 billion, al Zadjali said that the move would support the fiscal position and monetary stability.
“The move will help enhance confidence in the country’s financial system and help maintain sufficient capital and reserves”, he told the Observer.
He affirmed that the CBO maintains enough foreign reserves and adopts a monetary and banking policy that ensures stability of the fixed exchange rate of the Omani rial.
“This in turn leads to maintaining its purchase power against the different currencies,” he said.
According to CBO’s January bulletin, the foreign exchange position is healthy.
“Although the current account in the balance of payments is facing pressure, the CBO ensured that the foreign exchange reserves in its balance sheet remained healthy,” the report said.
Despite the oil prices continuing to remain relatively low, albeit some improvement seen in the recent period, the overall prospects of the Omani economy in general and the banking system in particular, remained resilient.
Preliminary national accounts data for Oman indicate that the nominal GDP declined by 9 per cent during the first nine months of 2016 compared to the same period last year.
The decline was reflected primarily in the petroleum sector with a fall of 29.4 per cent and a marginal drop of 0.2 per cent in the non-petroleum sector.
While manufacturing and wholesale and retail trade were adversely affected, value addition showed positive growth mainly in construction, agriculture and fishing as well as in real estate services.
Average annual inflation based on consumer price index for the Sultanate during January 2017 stood at 1.79 per cent mainly due to revision in energy prices, transport costs, education and other user fees.
The fiscal gap widened during the year and the government took several measures to augment non-oil revenues and rationalised government spending, apart from stepping up external borrowings.
The 2017 budget reflects fiscal prudence and is based on a conservative assumption of crude oil price at $45 per barrel.