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Wed 6 Apr 2016 01:53 PM

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Oman raises limit for banks' government bond holdings

Move will make it easier for the gov't to sell debt as it steps up bond issues to finance a big budget deficit caused by low oil prices

Oman raises limit for banks' government bond holdings

Oman's central bank has increased the maximum amount of government securities which banks can hold to 45 percent of their net worth from 30 percent, central bank and commercial banking sources said.

The move will make it easier for the government to sell debt as it steps up bond issues to finance a big budget deficit caused by low oil prices.

Omani conventional banks' holdings of government bonds jumped to 830.6 million rials ($2.16 billion) in January from 563.7 million rials a year earlier.

Earlier this week, the central bank adjusted its reserves policy to encourage banks to buy government debt; banks can now count Treasury bills, government development bonds and government sukuk towards their reserve requirements, up to a maximum of 2 percent of deposits. Overall, banks must park 5 percent of their deposits at the central bank.

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