Oman’s central bank plans to float OMR450 million worth of government development bonds in separate issues to partly cover deficit in the nation’s budget for 2017 and repay a maturing bond issue.
This is in addition to a OMR150 million bond issue recently, which takes the total issue size to OMR600 million this year.
Such government development bonds in Oman are generally subscribed to by institutional investors, especially pension funds, banks and high net worth individuals.
“We have issued OMR150 million worth of bonds. And the total budgeted bond issue for this year is for OMR600 million. About OMR200 million worth of bonds are maturing. So, the net will be OMR400 million and the gross issue for the year will be OMR600 million,” Hamoud Sangour Al Zadjali,executive president of the Central Bank of Oman (CBO), told journalists on the sidelines of the IFN Oman Forum 2017.
Referring to the recent overseas bond issue of $5 billion by the Oman government, Al Zadjali said, “It was overwhelmingly subscribed. The government was looking for about $3 billion to $5 billion and they got about four times of the issue. But the government wanted to just limit it to $5 billion, which was planned in the budget.”
The CBO chief further said overseas borrowing and local borrowing will be sufficient to meet the deficit this year, since there are other financial resources to meet the difference between expenditure and income.
Inflation expected at 2-3 per cent
Talking about the trend in inflation, he said that inflation is still under control. “We expect that inflation will be between 2 per cent and 3 per cent during the year.”
Al Zadjali also noted that there is enough liquidity within the banking system. “The banks are capable of meeting the demand for credit.”
The CBO chief does not expect much change in interest rates. The change in interest rates will also depend on the policy of the U.S. Federal Reserve, which is expected to be announced in March.
Addressing the IFN Oman Forum here on Tuesday, Sheikh Abdullah bin Salim Al Salmi, executive president of the Capital Market Authority (CMA), said the value of Sharia-complaint capital market products has touched OMR3.91 billion, which constitutes 22.64 per cent of the total issues in Oman.
As far as Takaful (Islamic insurance) is concerned, he said the premium income had reached OMR41.99 million by the end of 2016, which constitutes 9.2 per cent of the total insurance premium in Oman.
Al Salmi added that within a short span of four years, Islamic finance has emerged as one of the fastest growing segments within the financial services industry in Oman.
The IFN Oman Forum and Dialogue was organised by the Redmoney group, in partnership with the CMA. Representatives from Bank Muscat, Bank Dhofar and Bank Nizwa participated in a panel discussion, which provided an insight into Oman’s economic development and how Islamic finance was able to advance the country’s vision 2020.
Source : Times Of Oman
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