Country Report Oman April 2011

Outlook for 2011-12: Monetary policy

Monetary policy will be largely unchanged in 2011-12, and there will be little pressure on the Omani riyal's peg to the US dollar. Confidence in the peg is underpinned by a decision, announced by the executive president of the Central Bank of Oman, Hamood Sangour al-Zadjal, not to join the proposed Gulf Co-operation Council (GCC) single currency. This represents a shift from Oman's original position, which was to delay joining the currency until after 2010. The authorities have resisted pressure to revalue the riyal, insisting that the peg will remain in place for the foreseeable future. Omani lending rates are forecast to average around 7.4% a year in 2011-12.

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