The Omani government may consider borrowing money by issuing US dollar-denominated bonds next year, if need be, as a result of the fluctuation in oil prices.
But it does not plan to issue dollar bonds this year. Speaking to reporters on the sidelines of the 'Oman Forum' at Al Bustan Palace Hotel on Monday, H E Darwish al Balushi, Minister Responsible for Financial Affairs, said the government may consider dollar bonds next year. "But there will be clarity only by October this year when the government completes preparations for next year's budget."
He said, "We have our plans and will continue to watch global developments. Oil prices have sustained at a decent level over the last five years; but sometimes, due to economic cycles, they too fluctuate. If we see some fluctuation in oil prices and in case of further developments, we might need to borrow, which we would plan."
H E Balushi said that the primary purpose of a dollar-bond issue would be to establish a benchmark for the private sector and their borrowing requirements.
Oman last issued dollar-denominated bonds in 1997. In recent years the government has been issuing local-currency development bonds, but the ratio of Oman's debt to GDP was just 6.1 per cent in 2012, the second lowest in the GCC after Saudi Arabia.
The International Monetary Fund, in its latest World Economic Outlook, predicted that Oman's current account surplus will decline from 15.6 per cent of GDP in 2012 to 9.9 per cent in 2013, with a further decline to 4.7 per cent of GDP in 2014, the lowest level among all the GCC countries.
© Muscat Daily 2013
