|
Muscat: The Central Bank of Oman (CBO), in co-ordination with the Finance Ministry, has decided to make available US dollar funds to local banks through two mechanisms.
The first is the reserve swap facility and the second is direct lending in US dollars, according to a statement by the bank.
The scheme comes in a bid by the CBO to assist local banks to overcome the US dollar liquidity constraints brought on by the prevailing conditions in international markets.
In its monthly review of banking and monetary developments, the CBO attributed the immunity of Omani banks to their zero exposure to the toxic financial products or failing international institutions and CBO's sound regulations.
The reserve swap transaction envisages banks to enter into a forex swap transaction with the CBO, in which the banks will buy spot US dollars in the first leg in exchange for Omani riyals and sell them forward in exchange for Omani riyals at specified exchange rates.
The tenure of the swap will be one to three months.
The direct lending facility will be provided to the banks by the CBO in US dollars. The loan will be made available for a fixed period of one to three months.
|
