News Column

Savings and deposits in Oman's banks rise

August 30, 2014

ONA



Muscat:  Monetary management in 2014 continues to be confronted with abundance of bank liquidity.



As of the end of June 2014, narrow money stock (M1) when measured on year-on-year basis, grew sharply by 30.9 per cent driven mainly by an increase in currency with the public by 16.8 per cent, as well as increase in demand deposits by 36.2 per cent.



According to the report issued by the Central Bank of Oman (CBO), quasi-money (savings and time deposits, certificates of deposits issued by commercial banks, margin deposits and foreign currency denominated deposits in Omani rials) witnessed a growth of 8.5 per cent during the period. The share of quasi-money to the total money stock declined to 63.9 per cent in June, 2014 as compared to 68.1 per cent a year ago.



Broad money supply M2 (that is, M1 plus quasi-money) stood at OMR13,046.6 million at end of June 2014, up from OMR11,281.0 million a year ago, registering an increase of 15.7 per cent during the period.



In respect of the domestic interest rate structure of commercial banks, both deposit and lending rates softened during this period. CBO's policy interest rate for absorption of surplus liquidity in the form of CBO certificate of deposits of 28 days maturity marginally declined to 0.123 per cent in June, 2014 from 0.130 per cent in June, 2013.



The CBO's policy rate for injection of liquidity, that is, repo rate has remained unchanged at 1 per cent since March, 2012.



The CBO report pointed out that the ceiling interest rate on personal and housing loans was cut by one percentage point to 6 per cent with effect from October 2, 2013. The overnight domestic inter-bank lending rate in Omani rials declined from 0.156 per cent in June, 2013 to 0.128 per cent in June, 2014.



The weighted average interest rate on Omani rials deposits declined from 1.247 per cent in June, 2013 to 1.041 per cent in June, 2014 while the weighted average Omani rials lending rate decreased from 5.514 per cent to 5.207 per cent during the same period.




For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Times of Oman


Story Tools






HispanicBusiness.com Facebook Linkedin Twitter RSS Feed Email Alerts & Newsletters