Annual Report on Exchange Arrangements and Exchange Restrictions, 2007
Chapter

OMAN

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
October 2007
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(Position as of December 31, 2006)

Status under IMF Articles of Agreement
Article VIIIDate of acceptance: June 19, 1974.
Exchange Measures
Restrictions and/or multiple currency practicesNo restrictions as reported in the latest staff report as of December 31, 2006.
International security restrictionsRestrictions are imposed with respect to Israel.
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to impose restrictions on financial transactions of and to freeze accounts belonging to individuals or organizations associated with terrorism pursuant to UN Security Council resolutions.
Other security restrictionsYes.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
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.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)
On external tradeGold transactions with Israel are prohibited.
Controls on exports and imports of banknotesNo.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
References to legal instruments and hyperlinksn.a.
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.
References to legal instruments and hyperlinksn.a.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsExports to Israel are prohibited.
Export licensesNo.
Export taxesNo.
References to legal instruments and hyperlinksn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersPayments for invisibles are generally not restricted, except for payments to Israel.
References to legal instruments and hyperlinksn.a.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
References to legal instruments and hyperlinksn.a.
Capital Transactions
Controls on capital transactionsYes.
Repatriation requirementsNo.
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. For prudential purposes, all locally incorporated banks in Oman must be in the form of public joint-stock companies, and must comply with the regulation on shareholding patterns (i.e., up to 15% for an individual and related parties, up to 25% for an incorporated body, and up to 35% for a joint-stock company or a holding company and its related parties).
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.
References to legal instruments and hyperlinksn.a.
Provisions Specific to the Financial Sector
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.
Investment regulations
In banks by nonresidentsFor prudential purposes, all locally incorporated banks in Oman must be in the form of public joint-stock companies and must comply with the regulation on shareholding patterns (i.e., up to 15% for an individual and related parties, up to 25% for an incorporated body, and up to 35% for a joint-stock company or a holding company and its related parties).
Open foreign exchange position limitsA limit of 40% of banks’ respective capital and reserves applies. To limit maturity mismatches, 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.
References to legal instruments and hyperlinksn.a.
Changes during 2006
No significant changes occurred in the exchange and trade system.

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