Global: Oman’s CBO Implements Initiatives to Strengthen Monetary and Financial Landscape

The Central Bank of Oman (CBO) is driving several initiatives aimed at bolstering the country’s financial sector in collaboration with key stakeholders. According to a recent report from Oman Vision 2040, the CBO is enhancing its monetary policy framework within the fixed exchange rate system, contributing significantly to financial stability and macroeconomic growth.

Oman’s monetary policy, coordinated by the CBO alongside the Ministry of Finance’s fiscal policies, is integral to maintaining financial stability, improving the nation’s credit rating, stabilizing prices, and fostering economic growth. This strategic approach is expected to enhance confidence in the national economy and stimulate further economic expansion.

A key focus of the CBO’s initiatives is improving the management of local liquidity through a comprehensive operational framework. This involves strengthening the institutional and legal frameworks that empower the CBO to act as a lender of last resort, supporting financial stability during periods of market stress.

Several major initiatives are currently underway to advance Oman’s financial sector. These include:

• Strengthening the Development Bank’s role in financing small and medium-sized enterprises (SMEs).
• Developing a financial adequacy system to offer diverse financing tools based on creditworthiness.
• Establishing a venture capital fund with contributions from banks to support various business segments.
• Creating a market maker and liquidity provider.
• Launching a promising companies market on the Muscat Stock Exchange to boost market liquidity and innovation.

Additionally, efforts are being made to encourage more companies to list on the capital market and develop the local debt instruments market. Other key initiatives include establishing a national incubator for financial technology (FinTech) and preparing a sustainable sovereign financing framework.

The CBO, in collaboration with the Small and Medium Enterprises Development Authority, is addressing challenges faced by SMEs in accessing loans from commercial banks. Through the “Sustainability” programme, and in partnership with the Development Bank, the CBO is working to improve access to funding for economically impactful projects, ensuring that government support is directed towards initiatives that add local value.

Furthermore, the National Employment Programme is encouraging government sectors to create job opportunities for freelancers. A significant development in this area is the issuance of a circular from the CBO directing banks and financial institutions to facilitate the opening of bank accounts for freelancers, a move aimed at building a robust support system for the growing freelancer community.

These comprehensive efforts by the CBO are positioned to significantly strengthen Oman’s monetary policy and financial infrastructure, supporting broader economic goals under Oman Vision 2040.