Oman seeks multi-billion dollar deposit from Gulf states

Oman is negotiating with Gulf Arab states to secure a multi-billion dollar deposit in its central bank that would boost its foreign exchange reserves and head off any pressure on the rial, two sources have told Reuters.

Omani officials met in recent weeks with officials of the finance ministries of Kuwait, Qatar and Saudi Arabia to discuss the proposed deposit, the sources said, declining to be named because the matter is not public.

The talks are at an early stage but “signs so far are positive”, said an Oman-based source close to the discussions.

He added: “This can lessen the risk of devaluation.” A Qatari official confirmed that negotiations were under way.

“What is being discussed is in the region of billions of dollars,” he said. “It is in the collective interest of the region to keep the exchange rate intact.” Asked to comment, Oman’s central bank executive president, Hamoud Sangour Al Zadjali, referred questions to the Omani fin-ance ministry. However, he said the central bank was encouraging local banks to attract deposits of foreign exchange.

Officials of the finance ministries of Oman, Kuwait, Qatar and Saudi Arabia did not respond to telephone calls and emails requesting comment.

The proposed Omani deposit would be a fresh effort by the countries in the six-nation Gulf Cooperation Council to support the less wealthy members in order to prevent financial instability from spreading around the region.

According to Gulf News correspondent in Oman, the Oman Ministry of Finance refuted the report.

source: GULF NEWS