MUSCAT -- Broad money (M2) increased by 17.1 per cent to RO 10,214.9 million in March 2012 compared to RO 8,720.2 million in March 2011. Narrow money (M1), comprising currency held by the public and local currency demand deposits, expanded by 11.8 per cent to RO 3,469.9 million by March 2012 on a year-on-year basis. Quasi money (comprising RO savings and time deposits, certificates of deposit issued by commercial banks, margin deposits and foreign currency denominated deposits) increased by 20.1 per cent to RO 6,745.0 million in March 2012 compared to RO 5,616.4 million in the previous year.
As regards the sources of broad money supply (M2), net foreign assets of the banking system (including CBO) increased by 21 per cent to RO 6,016.0 million in March 2012 from RO 4,970.1 million in March 2011 whilst domestic assets increased by 12 per cent to RO 4,198.9 million from RO 3,750.1 million during the same period. CBO's policy rate for injection of liquidity, ie repo rate, which remained unchanged at 2 per cent until February 2012, was reduced to 1 per cent in March 2012 consistent with the LIBOR rate.
CBO's policy interest rate for absorption of surplus liquidity in the form of CBO CDs of 28 days maturity increased from 0.068 per cent in March 2011 to 0.083 per cent in March 2012. The overnight RO domestic inter-bank lending rate increased to 0.112 per cent in March 2012 from 0.108 per cent in March 2011. In respect of the domestic interest rate structure of commercial banks, the weighted average interest rate on RO deposits (demand, savings and time deposits of all sectors) declined from 1.509 per cent in March 2011 to 1.318 per cent in March 2012 while the weighted average RO lending rate decreased from 6.704 per cent to 6.085 per cent during the same period.
The interest rate spread between Rial Omani lending and Rial Omani deposit rates decreased from 5.195 per cent in March 2011 to 4.767 in March 2012. The Omani economy has benefited from the boom in oil prices, with the Gross Domestic Product (GDP) registering a rise of 22.7 per cent at the current prices in 2011. The Sultanate's GDP rose to RO 27 billion (RO 27,945.4 million) at the end of 2011, compared to RO 22,773 million as at the end of 2010. The GDP in oil activities grew by 36.3 per cent in 2011. It increased from RO 10,428.2 million at the end of 2010 to RO 14,216.4 million at the end of 2011.
Crude oil constituted the bulk share of this increase. Crude oil added value stood at RO 13,184.3 million (about 92.7 per cent) of the total oil activities. This sector achieved a growth rate of 37.9 per cent in 2011. Natural gas constituted 7.3 per cent of the total oil activities and its growth touched RO 1,032 million or 18.7 per cent in 2011.
© Oman Daily Observer 2012
