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Review of Banking and Monetary Developments – April 20226/13/2022 8:00:00 PMReview of Banking and Monetary Developments – April 2022The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed an increase of16.1 percent during 2021 over 2020.<p>​<span style="text-align:justify;">The nominal GDP, as per the preliminary data released by National Centre for Statistics and Information (NCSI), showed an increase of16.1  </span><span style="text-align:justify;">percent during 2021 over 2020. The expansion was driven by increase in output of the hydrocarbon sector by 38.5 percent and non-hydrocarbon sector by 8.4 percent. The Omani oil average price during Jan-Apr 2022 at $82.2 per barrel was higher by 57.1 percent than that in Jan-Apr 2021. The average daily oil production at 1,040.0 thousand barrels during Jan-Apr 2022 increased by 9.2 percent. The Sultanate's average Consumer Price Index (CPI) showed a Y-o-Y inflation of 3.7 percent during the period Jan-Apr2022.</span></p><p style="text-align:justify;">Other depository corporations (ODCs) consist of conventional and Islamic banks in Oman. Total outstanding credit extended by ODCs grew by 3.9  percent  to RO 28.2 billion at the end of April 2022, while credit to the private sector demonstrated a slight increase of  1.2 percent (Y-o-Y) to reach RO 23.6 billion.<br></p><p style="text-align:justify;">Non-financial corporations received the highest shares of the total private sector credit, at approximately 45.6 percent at end-April 2022, followed by household sector at 45.3 percent. The share of financial corporations was 5.4  percent while other sectors received the remaining 3.7 percent of total private sector credit as at end- April 2022. <br></p><p style="text-align:justify;">Total deposits held with ODCs registered a Y-o-Y growth of 3.3  percent to reach RO 25.8 billion at the end of April 2022. Total private sector deposits decreased by 0.2 percent to RO 17.2 billion. In terms of  sector-wise composition of private sector deposits, the biggest contribution is from household deposits at 53 percent, followed by non-financial corporations at 29.2 percent, financial corporations at 14.9 percent and other sectors at 0.8 percent. <br></p><p style="text-align:justify;">The combined balance sheet of conventional banks showed a Y-o-Y growth of 2.7  percent in total outstanding credit as of end- April2022. Credit to the private  sector increased by 0.2 to reach RO19.1 billion while their overall investments in securities went up by10  percent  to RO 5.3 billion at end- April 2022. Investment in Government Development Bonds decreased by 2.5  percent compared to the same period last year to RO 2.1 billion while their investments in foreign securities declined by 1.5  percent to RO 0.87 billion at the end of April 2022. On the liabilities side, aggregate deposits held with the conventional banks increased by 1.7 percent Y-o-Y to RO 21.2 billion at end-April 2022. Government deposits with conventional banks witnessed an increase of 13.6 percent at RO 5 billion,  and deposits of public enterprises increased by 11.7 percent to RO 1.4 billion. Private sector deposits, which accounted for 67.6 percent of total deposits with conventional banks, decreased by2.7 percent as of April 2022 to reach RO 14.4 billion. <br></p><p style="text-align:justify;">The total assets of Islamic Banks and Windows increased by 11.2 percent on a Y-o-Y basis to  RO 6.1 billion and constituted about15.6  percent of the banking system's assets as at end- April 2022. Islamic banking entities provided financing of  RO 5 billion at the end of April 2022, recording a growth of  9.9 percent over that a year ago. Total deposits held with Islamic banks and windows increased by11.8 percent to RO 4.5 billion. <br></p><p style="text-align:justify;">Among the indicators of monetary aggregates, broad money supply M2 at end- April 2022 increased by 1.7 percent to reach RO20.4 billion. Despite the decline in narrow money (M1) by 1.5 percent, the increase in M2 is attributed to the 3.0  percent increase in quasi-money (Rial Omani saving and time deposits, certificates of deposit issued by banks, margin deposits and foreign currency denominated deposits). Looking at components of narrow money (M1) during the same period, currency with the public increased by2.6 percent, while demand deposit fell by 2.8 percent .<br></p><p style="text-align:justify;">The weighted average interest rate on RO deposits with conventional banks witnessed a marginal decrease from 1.976 percent at end April 2021 to 1.891 percent at end- April 2022, while the weighted average RO lending rate decreased from 5.498 percent to 5.469 percent over the same period. Meanwhile, the overnight Rial Omani domestic inter-bank lending rate rose to 0.630 percent in April 2022 from 0.394 percent a year ago. The average Repo rate for liquidity injection by the CBO at end- April 2022 witnessd an increase, for the first time since March 2020,  to 0.717 from 0.5.<br></p>0x010100C568DB52D9D0A14D9B2FDCC96666E9F2007948130EC3DB064584E219954237AF3900075E4FF44B3F64489802BE694C5C6FB70300A9BCF8A0432A87429120A5B0A0EDBFF9

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