The total outstanding credit extended by other depository corporations (ODCs) consisting of conventional and Islamic banks in Oman grew by 4.3 per cent to RO27.3bn at the end of July 2021 while credit to the private sector demonstrated a moderate increase of 1.9 per cent (Y-o-Y) to reach RO23.3bn, according to the date of the Central Bank of Oman (CBO).

The non-financial corporate sector receives the highest share of the total private sector credit, over 46.6 per cent, followed by the household sector accounted for 45.2 per cent, at the end of July 2021. The share of financial corporations was 4.8 per cent and other sectors received the remaining 3.5 per cent of the total private sector credit at the end of July 2021.

Total deposits held with ODCs registered a Y-o-Y growth of 4.5 per cent to reach RO24.9bn at the end of July 2021. Total private sector deposits increased by 4.1 per cent to RO17.1bn.

In terms of the sector-wise composition of private sector deposits, the biggest share goes to household deposits at 51.9 per cent, followed by non-financial corporations at 32.1 per cent, financial corporations at 13.6 per cent and the other sectors at 2.4 per cent.

The combined balance sheet of conventional banks showed a Y-o-Y growth of 2.8 per cent in total outstanding credit as of end-July 2021. Credit to the private sector increased by 0.8 per cent to reach RO19bn while their overall investments in securities went up by 21.8 per cent to RO 4.8bn at end-July 2021.

Investment in Government Development Bonds increased by 18.7 per cent compared to the same period last year to RO2.2bn while their investments in foreign securities declined by 28.2 per cent to RO78 million at the end of July 2021.

Aggregate deposits held with the conventional banks increased by 2.4 per cent Y-o-Y to RO20.7bn at end-July 2021. Government deposits with conventional banks witnessed a decrease of 1.8 per cent at RO4.4bn, deposits of public enterprises went up by 15.9 per cent to RO1.3bn. Private sector deposits, which accounted for 70.1 per cent of total deposits with conventional banks, increased by 2 per cent as of July 2021 to reach RO14.5bn.

Islamic banking entities provided financing of RO4.6bn at the end of July 2021, recording a growth of 12.3 per cent over that a year ago. Total deposits held with Islamic banks and windows increased by 16.4 per cent to RO4.2bn. The total assets of Islamic Banks and Windows increased by 6.7 per cent on a Y-o-Y basis to RO5.7bn and constituted about 15.1 per cent of the banking system’s assets at the end of July 2021.

Among the indicators of monetary aggregates, broad money supply (M2) at end-July 2021 grew by 4.7 per cent to reach RO20bn. This increase was the outcome of 4.1 per cent expansion in narrow money (M1) and 4.9 per cent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits, and foreign currency denominated deposits).

Despite the decline in currency with the public by 5.8 per cent, the M1 witnessed a marginal increase, which resulted from the growth of demand deposits by 7.8 per cent, during the same period under discussion.

The weighted average interest rate on RO deposits witnessed a decline from 1.969 per cent at the end-July 2020 to 1.921 percent at the end-July 2021. Similarly, the weighted average RO lending rate increased from 5.441 per cent to 5.512 per cent over the same period.

Meanwhile, the overnight Rial Omani domestic inter-bank lending rate fell significantly to 0.420 per cent in July 2021 from 0.977 per cent a year ago, reflecting transmission of policy rate cuts by the CBO in line with the rate cuts by the Federal Reserve.

The average Repo rate for liquidity injection by the CBO at end-July 2021 remained at 0.5 per cent, the same as last year. This is attributable to the measure undertaken by CBO in March 2020 to support Banks’ finance and leasing corporations (FLCs) in the context of prevailing economic conditions.