$16b Total Assets of Oman’s Islamic Banking Sector

The headquarters of the Central Bank of Oman in the capital, Muscat. (Getty Images)
The headquarters of the Central Bank of Oman in the capital, Muscat. (Getty Images)
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$16b Total Assets of Oman’s Islamic Banking Sector

The headquarters of the Central Bank of Oman in the capital, Muscat. (Getty Images)
The headquarters of the Central Bank of Oman in the capital, Muscat. (Getty Images)

The total assets of Oman’s Islamic banking sector, including Islamic banks and windows operating in the sultanate, jumped by 9.1 percent year-on-year to reach at RO6.4 billion ($16.6 billion) by late September 2022.

Oman’s Islamic banking assets now account for 16.2 percent of the country’s total banking system assets, according to latest data released by the Central Bank of Oman (CBO).

According to Oman’s official news agency ONA, the total balance of financing granted by the sector also increased by 11.8 percent to about RO5.3 billion ($13.7 billion).

The total deposits held with Islamic banks and windows also increased by 12.5 percent to RO4.8 billion ($12.5 billion) in September.

Meanwhile, Standard and Poor’s (S&P) upgraded the country’s credit rating from “BB-”to “BB”, with stable future outlook due to its improved fiscal performance.

The rating agency underlined in its credit rating report on Saturday the sultanate’s improved performance in the balance of payments, measures undertaken by the government within the Medium Term Fiscal Plan (MTFP) and a rise in oil prices as factors projecting positive outlook, coupled with the improvement in the net asset position in 2023.

It expected a decline in the public debt rate vis-à-vis the Gross Domestic Product (GDP) from 61% in 2021 to 44% in 2022.

The agency also projected a rise in Oman’s revenues over the next two years, along with sustained fiscal surplus in its budget for 2024, which will enhance levels of the country’s financial reserves and achieve a 5.8% financial surplus over the GDP in 2022.

It expected the sultanate’s current account to post a 5.2% surplus vis-à-vis the GDP, compared to deficits of 4.9% and 16.2% in 2021 and 2020, respectively.

It said that economic growth in Oman will be supplemented by a projected rise in hydrocarbon production, improved investment rates and government measures directed at supporting society and the private sector.

S&P further expected Oman’s GDP to pick up by about 4% in 2022 and 3% in 2023.

Meanwhile, non-oil activities are scheduled to be the prime motivator of growth over the coming years, according to S&P, which projects a private sector growth of 1.8% in 2022 and 2.5% over the period 2024-2025.

The international agency commended the government’s tangible efforts in consolidating the principle of transparency and disclosure of financial statements and GDP data through the publication of regular circulars.

S&P noted that Oman’s credit rating may persist in its upward trend, provided measures to enhance the State’s financial position are maintained by channeling more financial surplus into the public debt reduction course and augmenting fiscal flexibility to help address any unexpected crises or upheavals.



IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
TT

IMF: Pakistan Wins More Financing Assurances from Saudi Arabia, UAE, China

Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)
Pakistan’s Prime Minister Shehbaz Sharif (Asharq Al-Awsat)

Pakistan has received “significant financing assurances” from China, Saudi Arabia and the United Arab Emirates linked to a new International Monetary Fund (IMF) program that go beyond a deal to roll over $12 billion in bilateral loans owed to them by Islamabad, IMF Pakistan Mission Chief Nathan Porter said on Thursday.

Porter declined to provide details of additional financing amounts committed by the three countries but said they would come on top of the debt rollover.

The IMF's Executive Board on Wednesday approved a new $7 billion loan for cash-strapped Pakistan, more than two months after the two sides said they had reached an agreement.

The loan — which Islamabad will receive in installments over 37 months — is aimed at boosting Pakistan's ailing economy.

“I won't go into the specifics, but UAE, China and the Kingdom of Saudi Arabia all provided significant financing assurances joined up in this program,” Porter told reporters on a conference call.

The global lender said its immediate disbursement will be about $1 billion.

In a statement issued Thursday, the IMF praised Pakistan for taking key steps to restore economic stability. Growth has rebounded, inflation has fallen to single digits, and a calm foreign exchange market have allowed the rebuilding of reserve buffers.

But it also criticized authorities. The IMF warned that, despite the progress, Pakistan’s vulnerabilities and structural challenges remained formidable.

It said a difficult business environment, weak governance, and an outsized role of the state hindered investment, while the tax base remained too narrow.

“Spending on health and education has been insufficient to tackle persistent poverty, and inadequate infrastructure investment has limited economic potential and left Pakistan vulnerable to the impact of climate change,” it warned.

Prime Minister Shehbaz Sharif in a statement hailed the deal that his team had been negotiating with the IMF since June.

Sharif, on the sidelines of the United Nations General Assembly, told Pakistani media that the country had fulfilled all of the lender’s conditions, with help from China and Saudi Arabia.

“Without their support, this would not have been possible,” he said, without elaborating on what assistance Beijing and Riyadh had provided to get the deal over the line.

The Pakistani government has vowed to increase its tax intake, in line with IMF requirements, despite protests in recent months by retailers and some opposition parties over the new tax scheme and high electricity rates.

Pakistan for decades has been relying on IMF loans to meet its economic needs.

The latest economic crisis has been the most prolonged and has seen Pakistan facing its highest-ever inflation, pushing the country to the brink of a sovereign default last summer before an IMF bailout.

Inflation has since tempered, and credit ratings agency Moody’s has upgraded Pakistan’s local and foreign currency issuer and senior unsecured debt ratings to “Caa2” from “Caa3”, citing improving macroeconomic conditions and moderately better government liquidity and external positions.