Annual Report on Exchange Arrangements and Exchange Restrictions 2005
Chapter

OMAN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2005
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(Position as of December 31, 2004)

Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: June 19, 1974.
Exchange Arrangement
CurrencyThe currency of Oman is the rial Omani.
Exchange rate structureUnitary.
Classification
Conventional pegged arrangementThe exchange rate of the rial Omani is pegged to the dollar at RO 1 per $2.6008. The commercial rates for other currencies are based on market rates in London.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketYes.
Official cover of forward operationsYes.
Arrangements for Payments and Receipts
Prescription of currency requirementsAll settlements with Israel and the use of its currency are prohibited.
Payments arrangements
Regional arrangementsOman is a member of the GCC Customs Union.
Administration of controlThe Central Bank of Oman has exclusive exchange control authority; there is no exchange control legislation.
International security restrictionsRestrictions are imposed with respect to Israel.
In accordance with IMF Executive Board Decision No. 144-(52/51)Yes.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
Controls on external tradeGold transactions with Israel are prohibited.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedNo distinction is made between accounts held by residents and those held by nonresidents.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadResidents are not allowed to maintain domestic currency accounts abroad.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetNo.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresLicenses are required for some imports. Importers must be registered in the commercial register.
Negative listCompanies operating in Oman and trading in manufactured oil products are prohibited from importing specified products as long as domestic production is deemed adequate to satisfy local demand.
Other nontariff measuresImports from Israel are prohibited.
Import taxes and/or tariffsIn accordance with the GCC Customs Union, a maximum CET of 5% is applied on most dutiable goods, and duties range from 5% for most goods to 100% for alcoholic beverages. Duties are not levied on imports from GCC countries or on government imports.
Taxes collected through the exchange systemYes.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsExports to Israel are prohibited.
Export licensesNo.
Export taxesNo.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles are generally not restricted, except for payments to Israel.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Purchase locally by nonresidentsForeign share ownership in Omani companies is generally limited to 70%, but it may be raised to 100%. A nonresident portfolio investor may not hold more than 10% of the shares in an Omani company.
Controls on derivatives and other instrumentsNo.
Controls on credit operationsNo.
Controls on direct investment
Inward direct investmentInvestment in business firms in Oman by nonresidents requires prior approval. Foreign ownership is generally limited to 70%, but it may be raised to 100% in certain cases.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase locally by nonresidentsThese transactions are not allowed, although some exceptions apply to citizens of the GCC countries.
Sale locally by nonresidentsYes.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Borrowing abroadForeign borrowing by individual commercial banks is restricted to 300% of their net worth. Subceilings of 200% and 100% are applicable for foreign loans with maturity periods of up to five years and up to two years, respectively. Foreign currency borrowing by nonbank financial institutions is limited to 100% of net worth.
Lending to nonresidents (financial or commercial credits)Lending to nonresidents is limited to 30% of the lending bank’s net worth with a sublimit of 5% for an individual nonresident borrower.
Open foreign exchange position limitsA limit of 40% of banks’ respective capital and reserves applies. In order to limit maturity mismatches, effective January 1, 2004, the cumulative gaps in domestic and foreign currency may not exceed 15% of cumulative liabilities (outflows) in each of the first five time bands.
Provisions specific to institutional investorsn.a.
Other controls imposed by securities lawsn.a.
Changes During 2004
Capital transactions
Provisions specific to commercial banks and other credit institutionsJanuary 1. In order to limit maturity mismatches in open foreign exchange positions of banks, the cumulative gaps in domestic and foreign currencies could not exceed 15% of the cumulative liabilities (outflows) in each of the first five time bands.

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