Narrow Your Choices

Refine By Topic

Refine By Series

Refine By Language

Refine By Date

—

Refine By IMF Taxonomy

Refine By JEL Taxonomy

Refine by LOC Taxonomy

Refine By THEMA Taxonomy

  • Print
  • Save

Middle East and Central Asia > Oman

You are looking at 1 - 10 of 10 items for :

  • Type: Journal Issue x
  • Financial services x
Clear All Modify Search
Cover Policy Papers
Annual Update on SDR Trading Operations
International Monetary Fund. Finance Dept.
This paper provides an update on the status of the SDR trading market and operations. For more than three decades, SDRs have exclusively been exchanged for freely usable currencies in transactions by agreement, primarily through the Voluntary Trading Arrangements (VTAs). A small fraction of transactions by agreement—sales or acquisitions of SDRs—has been arranged directly between parties. VTAs are bilateral arrangements between the Fund and SDR department participants or prescribed holders, in which the VTA participants agree to buy and sell SDRs within certain limits. The paper covers SDR trading operations during the period September 2023 to August 2024.
Keywords:
SDR trading capacity; SDR sale; SDR department participant; SDR amount; IMF SDR webpage; SDR interest rate; Currencies; Liquidity; Trading arrangements; Freely usable currencies; Middle East and Central Asia
Cover Selected Issues Papers
Monetary Policy Transmission in Oman
Thomas Kroen
Amid a pegged exchange rate to the US dollar and an open capital account, Oman’s policy rates move closely with US monetary policy. In this analysis, we show empirically that transmission from policy rates into effective lending and deposit rates remains subdued in Oman, even compared to GCC peers that similarly face a high oil price environment with persistent excess liquidity in the banking system. A cap on personal loan rates and low exposure of banks to SMEs and riskier borrowers limit passthrough into effective lending rates and credit conditions. The note documents ongoing actions by Omani policymakers to strengthen transmission and provides further recommendations on liquidity management, reserve management, and relaxing the interest rate cap.
Keywords:
monetary policy transmission; Oman's policy rates move; Fed policy rate hike; transmission from policy; credit growth; Deposit rates; Credit; Central bank policy rate; Excess liquidity; Interest rate ceilings
Cover Policy Papers
Resilience and Sustainability Trust – 2023 Contribution Agreements with Italy, Luxembourg, Oman, and the United Kingdom
International Monetary Fund. Finance Dept.
and
International Monetary Fund. Legal Dept.
This paper presents Resilience and Sustainability (RST) contribution agreements finalized with four contributors between April 2023 and September 15, 2023. The concluded agreements provide for contributions in a total amount of about SDR 4.7 billion across the three RST accounts – the loan account, deposit account, and reserve account. The new agreements with four members add critical resources that support the continued smooth operations of the RST.
Keywords:
Resilience and Sustainability Trust (RST); Contribution agreements; Resource adequacy; Funding; Contributions; transparency policy; contribution agreement; deposit account claim; SDR equivalent; reserve account contribution; Loans; SDR interest rate
Cover Departmental Papers
Assessing Banking Sector Vulnerabilities in the Gulf Cooperation Council in the Wake of COVID-19
Abdullah Al-Hassan
,
Imen Benmohamed
,
Aidyn Bibolov
,
Giovanni Ugazio
, and
Ms. Tian Zhang
The Gulf Cooperation Council region faced a significant economic toll from the COVID-19 pandemic and oil price shocks in 2020. Policymakers responded to the pandemic with decisive and broad measures to support households and businesses and mitigate the long-term impact on the economy. Financial vulnerabilities have been generally contained, reflecting ongoing policy support and the rebound in economic activity and oil prices, as well as banks entering the COVID-19 crisis with strong capital, liquidity, and profitability. The banking systems remained well-capitalized, but profitability and asset quality were adversely affected. Ongoing COVID-19 policy support could also obscure deterioration in asset quality. Policymakers need to continue to strike a balance between supporting recovery and mitigating risks to financial stability, including ensuring that banks’ buffers are adequate to withstand prolonged pandemic and withdrawal of COVID-related policy support measures. Addressing data gaps would help policymakers to further assess vulnerabilities and mitigate sectoral risks.
Keywords:
COVID-19; banking performance; corporates performance; sovereign-banks-economy nexus; bank asset quality; oil price shock; policy support; assessing banking sector vulnerability; C. bank assets quality; Financial statements; Commercial banks; Loans; Credit; Global; Middle East
Cover IMF Working Papers
Saudi’s Growth and Financial Spillovers to Other GCC Countries: An Empirical Analysis
Mr. Olumuyiwa S Adedeji
,
Mr. Sohaib Shahid
, and
Ling Zhu
This paper examines real and financial linkages between Saudi Arabia and other GCC countries. Growth spillovers from Saudi Arabia to Bahrain are found to be sizeable and statistically significant, but those to other GCC countries are not found to be significant. Equity market movements in Saudi Arabia are found to have significant implications for other GCC countries, while there is no evidence of co-movements in bonds markets. These findings suggest some degree of interdependence among GCC countries.
Keywords:
WP; GCC country; GCC sovereign bond market spillover; Growth; Gulf Corporation Council; Spillovers; growth shock; equity market movement; GCC bond spread; GCC equity; Stock markets; Yield curve; Sovereign bonds; Oil prices; Global
Cover Policy Papers
Gulf Cooperation Council: Strengthening Liquidity Management Frameworks in Support of Stability and Growth in the GCC
International Monetary Fund
Effective liquidity management is important to promote macro-financial stability in the GCC countries. Fixed exchange rate regimes provide credible nominal anchors in the GCC countries, but combined with open capital accounts, they also entail limited monetary policy independence. At the same time, high dependence on hydrocarbon revenue has made the region vulnerable to oil price-driven liquidity swings. And the latter can affect monetary policy implementation, including by exacerbating credit and asset price cycles. This highlights the importance of frameworks aimed at forecasting liquidity and ensuring appropriate liquidity levels through the timely absorption or injection of liquidity by central banks. Over the past decade, liquidity management in the GCC countries has been based mainly on passive instruments. Abundant liquidity during times of high oil prices have placed liquidity absorption at the center of the central bank operations. Reserve requirements have helped absorb liquidity but have not been used very actively. Standing facilities, another key instrument, are more passive in nature, with the amount of liquidity absorbed or injected driven by banks rather than monetary authorities. Central banks bills or other instruments have also been used, but issuance has not systematically been based on market principles. In addition, these operations have been constrained by limited liquidity forecasting capability and the shallow nature of interbank and domestic debt markets.
Keywords:
PP; liquidity condition; GCC country; GCC liquidity; liquidity fluctuation; evolving liquidity challenge; liquidity development; liquidity environment; liquidity forecasting capability; liquidity imbalance; liquidity management effort; liquidity management instrument; liquidity price-discovery mechanism; liquidity management framework; management operation; liquidity forecasting; Liquidity; Liquidity management; Interbank markets; Oil prices; Interbank rates; Global
Cover Policy Papers
Gulf Cooperation Council: The Economic Outlook and Policy Challenges in the GCC Countries
International Monetary Fund
Global economic activity is gaining momentum. Global growth is forecast at 3.6 percent this year, and 3.7 percent in 2018, compared to 3.2 percent in 2016. Risks around this forecast are broadly balanced in the near term, but are skewed to the downside over the medium term. The more positive global growth environment should support somewhat stronger oil demand. With inflation in advanced countries remaining subdued, monetary policy is expected to remain accommodative. GCC countries are continuing to adjust to lower oil prices. Substantial fiscal consolidation has taken place in most countries, mainly focused on expenditure reduction. This is necessary, but it has weakened non-oil growth. With the pace of fiscal consolidation set to slow, non-oil growth is expected to increase to 2.6 percent this year, from 1.8 percent last year. However, because of lower oil output, overall real GDP growth is projected to slow to 0.5 percent in 2017 from 2.2 percent in 2016. Growth prospects in the medium-term remain subdued amid relatively low oil prices and geopolitical risks. Policymakers have made a strong start in adjusting fiscal policy. While the needed pace of fiscal adjustment varies across countries depending on the fiscal space available, in general countries should continue to focus on recurrent expenditure rationalization, further energy price reforms, increased non-oil revenues, and improved efficiency of capital spending. Fiscal consolidation should be accompanied by a further improvement in fiscal frameworks and institutions. The direction of fiscal policy in the GCC is broadly consistent with these recommendations. Policies should continue to be geared toward managing evolving liquidity situations in the banking system and supporting the private sector’s access to funding. While countries have made progress in enhancing their financial policy frameworks, strengthening liquidity forecasting and developing liquidity management instruments will help banks adjust to a tighter liquidity environment. Banks generally remain profitable, well capitalized, and liquid, but with growth expected to remain relatively weak, the monitoring of financial sector vulnerabilities should continue to be enhanced. Diversification and private sector development will be needed to offset lower government spending and ensure stronger, sustainable, and inclusive growth. This will require stepped-up reforms to improve the business climate and reduce the role of the public sector in the economy through privatization and PPPs. Reforms are needed to increase the incentives for nationals to work in the private sector and for private sector firms to hire them. Increasing female participation in the labor market and employment would benefit productivity and growth across the region. Where fiscal space is available, fiscal policy can be used to support the structural reforms needed to boost private sector growth and employment.
Keywords:
PP; price; oil price; rate; Kuwait; No GCC; federal funds rate; current account; energy price reform; U.A.E. Qatar's export; commodity price rebound; forward rate; energy price; overnight rate; private sector development; price assumption; equity price; Oil prices; Fiscal consolidation; Real interest rates; Public sector; Global
Cover IMF Working Papers
Monetary Policy Transmission in the GCC Countries
Mr. Ananthakrishnan Prasad
and
Mr. Raphael A Espinoza
The GCC countries maintain a policy of open capital accounts and a pegged (or nearly-pegged) exchange rate, thereby reducing their freedom to run an independent monetary policy. This paper shows, however, that the pass-through of policy rates to retail rates is on the low side, reflecting the shallowness of money markets and the manner in which GCC central banks operate. In addition to policy rates, the GCC monetary authorities use reserve requirements, loan-to-deposit ratios, and other macroprudential tools to affect liquidity and credit. Nonetheless, a panel vector auto regression model suggests that U.S. monetary policy has a strong and statistically significant impact on broad money, non-oil activity, and inflation in the GCC region. Unanticipated shocks to broad money also affect prices but do not stimulate growth. Continued efforts to develop the domestic financial markets will increase interest rate pass-through and strengthen monetary policy transmission.
Keywords:
WP; rate; monetary policy; GCC Y; lending rate; Transmission mechanism; Fixed exchange rate regime; interest rate pass-through; panel VAR; interbank rate; monetary policy shock; deposit rate; fed funds rate; Interbank rates; Deposit rates; Vector autoregression; Central bank policy rate; Interest rate ceilings; Global
Cover Departmental Papers
Impact of the Global Financial Crisis on the Gulf Cooperation Council Countries and Challenges Ahead.
Ms. May Y Khamis
,
Mr. Abdelhak S Senhadji
,
Mr. Gabriel Sensenbrenner
,
Mr. Francis Y Kumah
,
Maher Hasan
, and
Mr. Ananthakrishnan Prasad
This paper focuses on impact of the global financial crisis on the Gulf Cooperation Council (GCC) Countries and challenges ahead. The oil price boom led to large fiscal and external balance surpluses in the GCC countries. However, it also generated domestic imbalances that began to unravel with the onset of the global credit squeeze. As the global deleveraging process took hold, and oil prices and production fell, the GCC’s external and fiscal surpluses declined markedly, stock and real estate markets plunged, credit default swap spreads on sovereign debt widened, and external funding for the financial and corporate sectors tightened. In order to offset the shocks brought on by the crisis, governments—buttressed by strong international reserve positions—maintained high levels of spending and introduced exceptional financial measures, including capital and liquidity injections. The immediate priority is to complete the clean-up of bank balance sheets and the restructuring of the nonbanking sector in some countries. Clear communication by the authorities would help implementation, ease investor uncertainty, and reduce speculation and market volatility.
Keywords:
DPPP; DP; banking sector; GCC country; credit bureau; GCC bank; investment funds; economic activity; U.S. dollar; Commercial banks; Credit; Islamic banking; Stock markets; Liquidity; Global; Middle East; North Africa; South Asia
Cover IMF Staff Country Reports
Kuwait: Selected Issues and Statistical Appendix
International Monetary Fund
This Selected Issues paper on Kuwait reviews its economic development strategy and uses a variety of analytical methods to highlight Kuwait’s policy challenges and their effectiveness. Kuwait has accumulated large fiscal surpluses, enabling it to build up a sizable asset position for future generations. The fiscal position is also expected to remain comfortable over the medium term, but the recent rapid increase in expenditures raises doubts about the sustainability of the current fiscal stance over the longer term.
Keywords:
ISCR; CR; Kuwait; GCC country; lending rate ceiling; ceiling; rate; policy challenge; ceilings in Kuwait; stock market capitalization; Stock markets; Interest rate ceilings; Fiscal stance; Fiscal sustainability; East Asia; Global; Middle East; North Africa; East Africa