By CentralBankNews.info
Oman’s central bank raised its interest rate on capital deposits by 50 basis points to 1.50 percent,, saying this change comes “after considering the prevailing interest rates within the Sultanate.”
In a statement dated March 14, the Central Bank of Oman added the revision in the rate takes effect from Jan. 1, 2018.
Oman is a member of the six-nation Gulf Cooperation Council (GCC), whose currencies are pegged to the U.S. dollar. GCC also includes Saudi Arabia, UAE, Bahrain, Qatar, Kuwait and Yemen.
The rate hikes follows Saudi Arabia’s rate hike on March 15 and comes a week before the U.S. Federal Reserve is expected to raise its rate on March 21.
Unlike the other members of GCC, Oman’s central bank has not been raising its interest rates in synch with the Fed and the bank’s former executive president has said he would not just blindly follow Fed decisions as Oman’s economic cycle differs from that of the U.S.
However, he added that rate increases may eventually become inevitable because of tightening liquidity in Oman’s banking system.
In September last year Oman’s ruler, Sultan Qaboos, restructured the central bank’s board, and appointed Tahir Salim al-Amri as new executive president.
In a statement from October, the bank’s board recognized the benefits of the peg to the U.S. dollar in terms of price stability, promoting economic growth, foreign direct investment and a stable interaction with the global economy.
