Recent rating downgrades won’t affect economy: CBO

March 13, 2019

Last week’s downgrade of Oman’s sovereign ratings by Moody’s Investors Service will not have much impact on the sultanate’s overall economy, according to the executive president of the Central Bank of Oman (CBO).

“The impact of any downgrading or movement in ratings is sort of ‘textbook only’ on what is going to happen. What we have noticed is that the market or the economy has already factored in from the previous downgrade by Fitch Ratings,” H E Tahir bin Salim al Amri said.

The CBO chief was speaking to reporters on the sidelines of IFN Oman Forum 2019, a day-long Islamic finance conference which took place at Grand Millennium Muscat on Tuesday.

Moody’s last week lowered the long-term issuer and senior unsecured bond ratings of the government of Oman to Ba1 from Baa3. Fitch Ratings in December had lowered Oman’s long-term foreign-currency issuer default rating to BB+ from BBB- with a stable outlook.

“The impact may not be that much from it (lower rating), but we have to work hard to address this issue,” H E Amri added.

Giving a keynote speech at IFN Oman Forum, H E Amri said he is very hopeful about growth prospects of Oman’s Islamic finance industry and urged industry players to be more innovative in their approach to keep growth momentum intact.

He said, “Islamic finance and banking entities operating in Oman need to initiate, both individually as well as collectively, campaigns that will allow the sector to extend outreach. Islamic banking sector also need to raise the bar for consumer services.”

Organised by REDmoney Events, IFN Oman Forum brought together senior Islamic finance and banking officials, regulators, insurance companies and other key industry players to review the recent developments and discuss the challenges and opportunities in Oman’s Islamic banking sector. The event was attended by more than 200 participants from Oman and abroad.

H E Abdullah bin Salim al Salmi, executive president of the Capital Market Authority (CMA) also addressed the forum as a keynote speaker. He said the CMA is looking at issuing regulations that could boost growth of Islamic finance products in the country.