Updated on September 09, 2020
Oman to tap into local and international debt to fill the coffers
- The Ministry of Finance confirmed that it had secured a $ 2 billion bridging loan
DUBAI: Oman will tap local and international debt markets to fill state coffers hit hard by low oil prices and the economic slowdown caused by the coronavirus crisis, its state news agency said on Wednesday citing the Ministry of Finance.
A relatively small crude producer burdened with high debt levels, Oman is more vulnerable to fluctuations in oil prices than most of its wealthier Gulf neighbors.
The finance ministry hired Bank Muscat and its Islamic unit Meethaq to host a local sukuk show, the Oman news agency said.
He said local development bonds worth 550 million Omani rials ($ 1.43 billion) had already been issued. The ministry also confirmed that it had secured a $ 2 billion bridging loan previously reported by Reuters.
The one-year loan will be repaid by an international bond issue, which would be Oman’s first since July 2019.
The finance ministry is working to implement its financing plan, “which includes the issuance of local and international bonds and sukuk” to meet its remaining needs for the year.
Oman’s budget deficit could reach 16.9% of gross domestic product this year, down from 7% last year, the International Monetary Fund has estimated.
The finance ministry said it has taken several measures to bring its deficit under control, focusing on reducing public spending.
He said that Oman’s commitment to OPEC + oil production cuts “was directly reflected in the financial estimates of oil revenues that were approved in the general state budget at the start. of the current year ”, in addition to the impact of low crude prices and the impact of the pandemic. .
($ 1 = 0.3850 Omani rials)