The Central Bank of Oman (CBO) recently concluded its second Board meeting of the year, where the Board of Governors delved into significant economic and financial matters both at the national and global levels.
At the forefront of the discussions was a review of major economic and financial developments in Oman and worldwide. Of particular interest was the CBO's decision to maintain the interest rate on repurchase operations (repo) at 5.75 per cent, aligning with the bank's monetary policy. This decision followed the US Federal Reserve's choice to keep interest rates unchanged. The Board commended the CBO for its diligent monitoring and assessment of the financial and monetary landscape within the Sultanate of Oman.
The Board also took stock of important regulatory updates, including the authorized activities for finance and leasing companies, the launch of the first phase of the national platform for Know Your Customer and Digital Onboarding procedures, and the policy for licensing payment service providers. Notably, the Board expressed satisfaction with the successful implementation of the national Real Time Gross Settlement System (RTGS), which commenced operations on June 18, 2023. Operating around the clock, the system achieved a remarkable milestone by settling 3,147 transactions totaling over RO 409 million on its inaugural operational day.
In terms of banking operations, the Board approved HSBC Bank Middle East Limited's request to establish a branch and engage in banking activities in Oman. This decision mirrored previous approvals granted to Mashreq Bank and Gulf International Bank for their branches in the country. Additionally, the Board granted approval to Sohar International Bank to establish a branch in the Kingdom of Saudi Arabia. The Board also evaluated and approved requests from Salis Pay, the Global Money Exchange Company, and FRIENDI Pay to operate as Payment Service Providers (PSPs). Furthermore, the Board considered a proposal to establish a new investment bank named Oman Investment Bank, which was approved pending fulfillment of the necessary requirements and conditions.
During the meeting, the Board also engaged in discussions regarding the Omani banking sector, including studies on the impact of interest rate caps on personal loans and the performance of licensed PSPs.
The Board's deliberations further encompassed the examination of reports on financial soundness indicators of banks, the positive status of reserves, and the successful performance of CBO's foreign investments. They also reviewed the financial position of the CBO itself, along with a semi-annual report on the project aimed at enhancing the efficiency of monetary policy. Additionally, the Board considered a report on the prospects and challenges for economic stability in Oman, as well as the development of a methodology for calculating a financial stability index within the Sultanate.
In addition to these crucial topics, the Board made appropriate decisions on various other matters discussed during the meeting.
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