Oman CB won’t blindly fol­low Fed de­ci­sion

Kuwait Times - - BUSINESS -

Oman’s cen­tral bank won’t au­to­mat­i­cally im­i­tate last week’s in­ter­est rate hike by the US Fed­eral Re­serve, cen­tral bank ex­ec­u­tive pres­i­dent Hamood San­gour Al-Zad­jali told Reuters yes­ter­day. Oman is the only mem­ber of the six-na­tion Gulf Co­op­er­a­tion Coun­cil not to an­nounce an of­fi­cial in­ter­est rate rise in the wake of the Fed’s 0.25 per­cent­age point in­crease. The Omani cen­tral bank will mon­i­tor in­ter­est rates of­fered by lo­cal banks and will not “blindly fol­low the Fed­eral Re­serve’s de­ci­sion”, Zad­jali said. “Even though the Omani rial is pegged to the US dol­lar, the eco­nomic cy­cle in the US is dif­fer­ent from the lo­cal eco­nomic cy­cle.” Zad­jali added, “Oman has its in­de­pen­dent poli­cies with re­gards to this is­sue. The si­t­u­a­tion needs to be deeply and care­fully stud­ied be­fore any de­ci­sions, keep­ing the na­tional econ­omy’s in­ter­est in mind.” The cen­tral bank’s overnight re­pur­chase rate, which is de­ter­mined by a for­mula based on the Lon­don in­ter­bank of­fered rate, has been edg­ing up in the last few months from the 1.00 per­cent level where it was for years. The rate hit 1.195 per­cent last week.

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