Oman’s narrow money supply rises

Muscat: The nation’s narrow money stock (M1), when measured on a year-on-year basis, grew by 4.4 per cent to OMR5.4 billion at the end of April 2016. This rise was a result of the increase in currency with the public by 8.4 per cent and an increase of 3.2 per centin Rial Omani (RO) designated demand deposits.
Quasi-money (RO savings and time deposits, certificates of deposit issued by commercial banks, margin deposits and foreign currency denominated deposits) witnessed an appreciable growth of 13.9 per cent during the period.
The broad money supply M2 (MI plus quasi-money) stood at OMR15.7 billion at the end of April 2016, up from OMR14.2 billion one year ago, registering an increase of 10.4 per cent during the period.
With respect to the domestic interest rate structure of conventional banks, the weighted average interest rate on RO deposits firmed up from 0.908 per cent in April 2015 to 1.083 per cent in April 2016, while the weighted average RO lending rate decreased from 4.945 per cent to 4.796 per cent during the same period. Also, the overnight Rial Omani domestic inter-bank lending rate rose to 0.401 per cent in April 2016 from 0.197 per cent one year ago.
Traded cash rises 4.8%
The total issued (traded) cash at the end of April has increased by 4.8 per cent to OMR1.68 billion, from OMR1.60 billion recorded during the same period of 2015, data released by the National Centre for Statistics and Information (NCSI) indicate.
The money supply, in its narrow sense, constituted the total cash available outside the banking system, in addition to the current accounts and demand deposits in the local currency, which has increased to reach OMR5.34 billion, compared to OMR5.16 billion recorded during the same period in 2015, registering an increase of 4.4 per cent.
The local liquidity at the end of last April increased, with 10.4 per cent logging OMR15.70 billion compared to the figures recorded during the same period last year, which witnessed a local liquidity of OMR14.22 billion.
Further, total foreign assets at the central bank reached OMR6.68 billion, with a decline of six per cent compared to the figures recorded during the same period of 2015, in which the foreign assets reached OMR7.11 billion.
The private sector's current deposits at commercial banks reached OMR12.99 billion at the end of last April, recording an increased rate of 12.6 per cent, compared to figures recorded during the same period in 2015, which witnessed deposits amounting to OMR11.54 billion.
Additionally, total loans at the commercial banks also increased by 20.5 per cent to reach RO 21,114.5 million, compared to OMR17.52 billion recorded during the same period last year.
The average interest rate for total loans decreased by 1.4 per cent, as it reported 4.5 per cent at the end of last April compared to 4.6 per cent during the same period in 2015.