CBO to propose two development bonds

Muscat: Oman, through the Central Bank of Oman (CBO), is likely to propose two development bonds worth 122 million riyals (Dh1.15 billion) this year to repay two maturing bond issues, according to Hamoud Bin Sangour Al Zadjali, the CBO Executive President.

"There will be some borrowings as two development bonds would mature this year," the CBO chief said on the sidelines of an investors' meet organised by the country's leading financial institute, BankMuscat.

Al Zedjali added that the budget deficit would be wiped out if crude oil prices stayed at current levels. "This matter, however, is looked after by the Ministry of Finance and not the CBO," he said.

The government, in its budget documents, had said its fiscal deficit for the year would be 13 per cent of its revenues or three per cent of its gross domestic product (GDP) on an assumption that oil prices would be at least $50 per barrel. Global crude oil prices jumped 78 per cent in 2009 as recovery from a global recession boosted demand for the fuel.

On the liquidity situation, the CBO chief said banks will be able to meet the entire credit requirement of both the private as well as government sectors.

"I don't think [the] interest rate will go up," he said.

"There is plenty of liquidity available in the economy to meet the growth requirements."