Sultanate’s economy is resilient

A host of economic and financial policies adopted during the previous period has contributed to the “acclimatisation” of Omani economy to the challenges posed by economic developments, according to Hamoud bin Sangour al Zadjali, Executive President of Central Bank of Oman (CBO). These policies have ensured stabilisation of Omani rial and foreign reserves, he told Oman Arabic, the sister publication of the Observer.

Al Zadjali expects a further balance in foreign reserve market and local currency exchange in the long- and mid-term due to implementation of many projects in various sectors.

This, he said, will boost the export of commodities and services, thus increasing both foreign currency receipts and government revenues, while the flow of foreign direct investment will contribute to the reinforcement of foreign currency reserves.

Al Zadjali said the Omani economy is resilient and flexible, thanks to a number of factors such as the stability of the “saving system”, which is represented by the tightly monitored financial sector and an efficient and flexible interest rate.

The CBO, he said, has managed to maintain the attractiveness of the local currency and has avoided falling into a “high dollarisation” level which could pressurise the central bank’s foreign reserves.

“Financial credit has continued to flow in various sectors keeping economic activity in good shape, thus enhancing the confidence of both consumers and investors,” he said.

“Loan portfolio is quite efficient and the non-performing loans stand at 2 per cent. Islamic banking has picked up momentum in the previous period, accounting for RO 3.2 billion or 10.6 per cent of the total assets of the banking sector,” he added.