The Sultanate of Oman today prepaid part of the government loans, about (USD 1.5 billion), before their maturity date.
In total, the government managed to reduce by the end of the first quarter of 2023 an estimated of about RO 1.1 billion, or USD 2.8 billion, without resorting to re-financing.
This includes USD 1.3 billion bond repaid by the government in January 2023.
The public debt is down to about RO 16.6 billion by the end of March 2023, compared to RO 17.7 billion reported at the end of 2022.
At the same time, Oman also reduced significantly the interest rate for the same loan through negotiation with lenders. This resulted in obtaining a lower financing cost than the currently market prevailing financing rates whilst maintaining same lenders group of international and regional banks. The successful repricing confirms Oman’s robust financial position.
The Ministry of Finance stated that the effective debt management activities taken led to achieving savings in the costs of servicing public debt about USD one billion, or about RO 385 million over the average life of debt portfolio.
The debt management activities fit within the framework of continuous revision of the debt portfolio and related financing costs.
It affirms the government’s determination to reduce the public debt rate, taking advantage of the additional revenues and the rise in global oil prices.
This would enable the government to utilize these savings in priority areas.
Through early repayment of some loans, the government seeks to alleviate the burden of public indebtedness, manage the risks of the lending portfolio and reduce potential pressures towards financing obligations in the coming years, the Ministry of Finance explained.
These measures to cut down public debt assume significance in light of the high interest rates approved by the US Federal Bank. The move also aims at improving Oman’s credit ratings.
Source: Oman News Agency