Oman: The total credit balance granted by conventional commercial banks recorded an increase of 5.1 percent to reach OMR 20.2 billion at the end of June 2023 according to the monthly bulletin of the Central Bank of Oman (CBO).

The total investment of traditional commercial banks in securities witnessed a decrease of 5.9 percent, to about OMR 4.6 billion at the end of last June, while investment in government development bonds (GDBs) decreased by 5.1 percent compared to the same period in 2022, to reach OMR 2.1 billion. Their investments in foreign securities increased by 90.8 percent to reach OMR 1.3 billion.

On the liabilities side, total deposits with conventional commercial banks increased by 3.1 percent to reach OMR 22.2 billion at the end of June 2023.

Government deposits with commercial banks increased by 7.7 percent to about OMR 5.4 billion. The deposits of public sector institutions increased by 1.6 percent to about OMR 1.6 billion during the same period.

Meanwhile, private sector deposits increased by 2.1 percent to reach OMR 14.8 billion in June 2023, constituting 66.4 percent of total deposits with conventional commercial banks.

Broad Money Supply

The broad money supply grew by 2.8 percent year-on-year, to reach OMR21.4 billion at the end of June 2023, while cash in its narrow sense decreased by 4.8 percent.

The increase in cash in the broad money supply was attributed to the increase in quasi-money by 5.9 percent. It consists of the sum of savings deposits, term deposits in Rial Omani, and certificates of deposit issued by banks, in addition to margin accounts and all deposits in foreign currency with the banking sector.

Cash with the public increased during the same period by 2.5 percent while demand deposits decreased by 6.9 percent.

With regard to the interest rate structure of conventional commercial banks, the weighted average interest rate on deposits in Rial Omani increased from 1.870 percent in June 2022 to 2.313 percent in June 2023. The weighted average interest rate on loans in Rial Omani decreased from 5.502 percent to 5.434 percent during the same period.

As for the average interest rates in the interbank lending market for one night, it recorded an increase of 5.350 percent in June 2023, compared to 1.450 percent in June 2022.

This came as a result of the increase in the weighted average interest rate on repurchases to 5.750 percent compared to 1.875 percent during the same period last year, in line with the policies of the US Federal Reserve.

Assets of Islamic Banks and Windows Top OMR 7 Billion

The total assets of Islamic banks and windows combined recorded growth by the end of June 2023 to reach about OMR 7 billion. This is 17.2 percent of the total assets of the banking sector in the Sultanate of Oman by the end of June this year, higher by 12.6 percent compared to the same period last year.

The total balance of financing granted to Sharia-compliant banking entities in Oman engaged in this activity increased by 12.8 percent to reach OMR 5.8 billion.

Deposits with Islamic banks and windows also increased by 10.5 percent and reached about OMR 5.2 billion at the end of last June this year.