The Sultanate of Oman has seen a significant increase in its broad money supply, which grew by 12.6 percent on an annual basis to reach OMR24.8 billion by the end of October 2024. This growth can be attributed to a 24.8 percent increase in narrow money and an 8.4 percent increase in quasi-money, which includes total savings and time deposits in Omani riyals, certificates of deposit, margin accounts, and foreign currency deposits in the banking sector. Cash held by the public decreased by 5.9 percent, while demand deposits increased by 33.2 percent during the same period.
In terms of interest rates, the weighted average interest rate on deposits in Omani riyals rose from 2.531 percent in October 2023 to 2.709 percent in October 2024. Similarly, the weighted average interest rate on loans in Omani riyals increased from 5.452 percent to 5.628 percent over the same period. The average interest rates in the overnight interbank lending market saw a decrease from 5.584 percent in October 2023 to 4.681 percent in October 2024, due to a decrease in the weighted average interest rates on repurchase operations to 5.500 percent compared to 6.000 percent the previous year, in line with US Federal Reserve policies.
Islamic banking in Oman has also shown growth, with total assets of Islamic banks and windows combined reaching OMR8.3 billion, representing 18.7 percent of the total assets of the banking sector by October 2024. This marked a 16.4 percent increase from the same period in 2023. The total financing balance granted by units engaged in Islamic banking activities increased by 13.8 percent to approximately OMR6.7 billion, while deposits in Islamic banks and windows saw a 24 percent increase to OMR6.5 billion by the end of October 2024.
Overall, the Sultanate of Oman’s banking sector continues to show positive growth in terms of money supply, interest rates, and Islamic banking assets. With a stable and growing economy, Oman remains an attractive destination for investors looking to participate in the country’s financial sector. The Central Bank of Oman’s data indicates a resilient and expanding banking industry, further supported by policies that align with global market trends and economic conditions. The future of Oman’s banking sector looks promising, with continued opportunities for growth and development in the coming years.
