The Foreign Exchange Reserve Assets Portfolio (FXRAP) is managed by officials of Investment and Treasury in compliance with Banking Law, Investment Guidelines, Board of Governors' Directive, Directives of Reserve Asset Management Committee (RAMC) and Investment Committee (IC) aiming at fulfilling the following main objectives;
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1. |
Capital preservation. |
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2. |
Maintaining sufficient reserves and liquidity to ensure the sustainability of the currency peg. |
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3. |
Optimal mix of return and risk |
The reserves are divided into three distinct segments to suit the needs:
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1. |
Liquidity Tranche: To meet the commercial banks liquidity needs. |
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2. |
Bridge Tranche: To provide a cushion whenever the size of the liquidity tranche falls below a threshold. |
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3. |
Income Tranche: core investment portfolio with the objectives of capital preservation and enhanced return. |
In addition, a portion of the FXRAP may be earmarked for placement with one or more external funds mangers with the approval of the board of Governors.
Treasury Department is responsible for:
Managing and maintaining the Liquidity Tranche as per the Banking Law and Investment Guidelines. The primary objective of the Liquidity Tranche is to provide and maintain sufficient funds in U.S. Dollars to meet day-to-day local market demand. The secondary objective is to achieve a reasonable rate of return.
Principal activities of Treasury Department include:
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1. |
USD/OMR purchase from and sale to: |
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- The Government |
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- Licensed Banks |
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- International financial institutions |
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2. |
Dealing in short term Money Market instruments namely: |
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- Money Market transactions (placements and deposits) |
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- Call/Current accounts |
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- BIS instruments (FXBIS and FRIBIS) |
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- Repurchase Agreement |
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- Certificates of Deposits |
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3. |
Foreign Exchange transactions namely; Spot, Swaps, Forward and other approved instruments as per the Investment Guidelines. |
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4. |
Absorbing excess foreign currency liquidity in the local market. |
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5. |
Managing Foreign currency accounts on behalf of Ministry of Finance and other government entities. |
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6. |
Publishing daily official exchange rate. |
Investment Department is responsible for:
Managing the “Income and Bridge Tranches” component of CBO foreign currency reserve assets in a prudent way to achieve optimal mix of return and risk while fulfilling the objectives of achieving capital preservation and liquidity.
The permissible investment assets are:
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1. |
Money market instruments |
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Example: |
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- Time deposits |
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- Treasury Bills |
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- Certificate of deposits. |
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2. |
Bond market instruments |
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Example: |
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- Sovereign Government |
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- Supranational Entities
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3. |
Others investment Activates |