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Oman Central Bank's Foreign Assets Decline to 6.5 Bln Rials in November

The total investments of traditional commercial banks in securities increased by 13.2 percent to reach about $12.5 billion by the end of November. (Oman News Agency).
The total investments of traditional commercial banks in securities increased by 13.2 percent to reach about $12.5 billion by the end of November. (Oman News Agency).
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Oman Central Bank's Foreign Assets Decline to 6.5 Bln Rials in November

The total investments of traditional commercial banks in securities increased by 13.2 percent to reach about $12.5 billion by the end of November. (Oman News Agency).
The total investments of traditional commercial banks in securities increased by 13.2 percent to reach about $12.5 billion by the end of November. (Oman News Agency).

The foreign assets held by the Central Bank of Oman contracted to 6.52 billion Omani riyal ($16.98 billion), marking a 4.27 percent decrease compared to year-end 2022, according to the latest data.

Concurrently, traditional bank lending in Oman witnessed a 4.45 percent year-on-year upswing in November, as reported in the monthly statistical bulletin released by the Central Bank.

The weighted average lending rate increased from 5.372 percent to 5.485 percent over the same period.

​The nominal GDP declined 3.9 percent at the end of the third quarter of 2023 over the same period of 2022. The contraction was driven by a decrease in the output of the hydrocarbon sector by 15.4 percent.

As for the real GDP, it demonstrates an increase of 2.0 percent during the same period under discussion. Similarly, this expansion was driven by 0.5 percent of the oil sector and 2.7 percent of the non-oil sector.

The average Omani oil price at the end of November 2023 at $81.6 per barrel was lower by 14.8 percent than in November 2022.

Credit to the private sector demonstrated an increase of 4.8 percent (Y-o-Y) to reach OMR 25.5 billion ($66 billion) at the end of November.

Total deposits held with ODCs registered a Y-o-Y significant growth of 9.9 percent to reach OMR 28.4 billion ($73.97 billion).

The biggest contribution in private sector deposits was from household deposits at 49.7 percent, followed by non-financial corporations at 34.1 percent.

Credit to the private sector increased by 3.3 percent to reach OMR 20.1 billion ($52 billion), while their overall investments in securities increased by 13.2 percent to around $12.5 billion at the end of November 2023.

Investment in Government Development Bonds decreased by 10.5 percent to OMR 1.9 billion ($4.5 billion).

The weighted average interest rate on OMR deposits with conventional banks increased from 1.923 percent at the end of November 2022 to 2.603 percent at the end of November 2023.

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.