CBO issues treasury bills worth Ro25mn

The Central Bank of Oman (CBO) issued two tenders of the government treasury bills this week to raise a total Ro25mn.

In the first tender, the value of allotted treasury bills amounted to Ro5mn, for a maturity period of 28 days. The average accepted price reached RO99.650 for every RO100, and the minimum accepted price arrived at RO99.650 per RO100. The average discount rate and the average yield reached 4.5625 per cent and 4.5785 per cent, respectively.

For the second tender, the value of the allotted treasury bills amounted to Ro20mn, for a maturity period of 91 days. The average accepted price reached RO98.761 for every RO100 bill, and the minimum accepted price arrived at RO89.760 per RO100. The average discount rate and the average yield reached 4.9706 per cent and 5.0329 per cent, respectively.

Treasury bills are short-term highly secured financial instruments issued by the Ministry of Finance, and they provide licensed commercial banks the opportunity to invest their surplus funds. The Central Bank of

Oman (CBO) acts as the issue manager and provides the added advantage of ready liquidity through discounting and repurchase facilities.

The interest rate on the repo operations with the CBO is 5.75 per cent while the discount rate on the treasury bills discounting facility with the central bank is 6.25 per cent.

Furthermore, treasury bills promote the local money market by creating a benchmark yield curve for short-term interest rates.

The government may also resort to this instrument whenever felt necessary for financing its recurrent expenditures.