The Sultanate of Oman today prepaid part of the government loans, about US$1.5bn, before their maturity date.

In total, the government managed to reduce by the end of the first quarter of 2023 an estimated of about RO1.1bn, or US$2.8bn, without resorting to re-financing.

This includes a US$1.3bn bond repaid by the government in January 2023.

Public debt is now down to about RO16.6bn by the end of March 2023, compared to RO17.7bn reported at the end of 2022.

At the same time, Oman also reduced significantly the interest rate for the same loan through negotiation with lenders. This resulted in obtaining a lower financing cost than the current market prevailing financing rates whilst maintaining the same lenders group of international and regional banks. The successful repricing confirms Oman’s robust financial position.

The Ministry of Finance stated that the effective debt management activities taken led to achieving savings in the costs of servicing public debt of about US$1bn, or about RO385mn over the average life of the debt portfolio.

The debt management activities fit within the framework of the continuous revision of the debt portfolio and related financing costs.

It affirms the government’s determination to reduce the public debt rate, taking advantage of the additional revenues and the rise in global oil prices.

This would enable the government to utilise these savings in priority areas.

Through early repayment of some loans, the government seeks to alleviate the burden of public indebtedness, manage the risks of the lending portfolio and reduce potential pressures towards financing obligations in the coming years, the Ministry of Finance explained.

These measures to cut down public debt assume significance in light of the high-interest rates approved by the US Federal Bank. The move also aims at improving Oman’s credit ratings.