Oman Money Supply Grows 12.7 Per Cent

By the Editorial Team · Sunday, July 26, 2026

Oman's broad money supply grew by 12.7 percent year-on-year to 28.60 billion rials at the end of May 2026, driven mainly by increased cash holdings and demand deposits. This expansion, alongside declining borrowing and deposit interest rates, may stimulate credit demand while lowering returns for savers amid continued alignment with US monetary policy.

The broad money supply in Oman rose by 12.7 percent year-on-year to reach 28.60 billion Omani rials at the end of May 2026, according to data released by the Central Bank of Oman. This increase was primarily fueled by a notable expansion in cash holdings and demand deposits within the economy.

Narrow money, which includes currency in circulation and demand deposits that are readily accessible, surged by 26.9 percent compared to the same period last year. Quasi-money—comprising savings and time deposits denominated in Omani rials, certificates of deposit issued by banks, margin accounts, and foreign-currency deposits within the banking system—registered a more moderate growth of 7.1 percent.

Within the components of narrow money, currency in circulation expanded by 12.1 percent, while demand deposits climbed sharply by 29.8 percent. These figures indicate an increase in immediately available liquidity in the domestic market.

The rise in money supply coincided with a decline in borrowing and deposit interest rates at conventional commercial banks. The weighted average interest rate on deposits denominated in Omani rials fell to 2.366 percent in May 2026 from 2.708 percent a year earlier. Similarly, the weighted average lending rate on Omani rial loans decreased to 5.327 percent from 5.551 percent over the same timeframe.

Interbank funding costs also eased during the period. The average overnight interbank lending rate dropped to 3.375 percent in May 2026, down from 4.394 percent the previous year. Additionally, the weighted average rate on repurchase agreements declined to 4.250 percent from 5.000 percent, reflecting broader monetary conditions and interest-rate adjustments by the US Federal Reserve.

Oman’s currency, the rial, is pegged to the US dollar, causing domestic monetary policy to generally align with changes in US interest rates to maintain the currency's peg. The recent reduction in lending rates may encourage increased credit demand by businesses and households, while the simultaneous fall in deposit rates is likely to reduce returns for savers holding rial-denominated accounts.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.