Oman’s economy is showing signs of growth, as the country’s broad money supply increased by 12.7 percent on an annual basis, reaching OMR24.1 billion by the end of June 2024. Data released by the Central Bank of Oman (CBO) indicates that this growth was driven by a 16.7 percent increase in narrow money and an 11.2 percent increase in quasi-money. Quasi-money consists of total savings deposits, time deposits, certificates of deposit issued by banks, margin accounts, and all deposits in foreign currency within the banking sector.
Cash held by the public decreased by 9.2 percent, while demand deposits saw a significant increase of 24.6 percent by the end of June 2024. The interest rate structure of conventional commercial banks also saw increases, with the weighted average interest rate on deposits in Omani riyals rising from 2.313 percent in June 2023 to 2.651 percent in June 2024. Similarly, the weighted average interest rate on loans in Omani riyals increased from 5.434 percent to 5.581 percent during the same period.
In the overnight interbank lending market, average interest rates rose from 5.350 percent in June 2023 to 5.402 percent in June 2024. This increase is attributed to the rise in the weighted average interest rate on repurchase operations, which reached 6 percent compared to 5.750 percent in the previous year. These changes align with the policies of the US Federal Reserve and indicate a strengthening economy in Oman.
The growth in money supply and interest rates reflects a positive trend in Oman’s financial sector, highlighting increased economic activity and confidence in the market. With demand deposits on the rise and interest rates showing an upward trajectory, businesses and consumers alike are likely to benefit from a more robust financial environment. These developments could contribute to further investment and economic growth in Oman in the coming months.
The Central Bank of Oman’s data reveals not only a increase in money supply but also a corresponding growth in economic activity, with higher interest rates reflecting a more competitive financial landscape. As the country continues to navigate economic challenges and opportunities, the growth in broad money supply and interest rates bode well for sustained development and prosperity in Oman. This positive outlook may attract further investment and drive continued growth in the country’s economy.
Overall, Oman’s financial sector is witnessing positive growth, as reflected in the increase in broad money supply and interest rates. This growth signifies a strong and healthy economy, with potential for further expansion and development in the future. By maintaining a competitive financial landscape and fostering a conducive environment for investment, Oman is on track to achieve sustained economic growth and prosperity for its citizens.
