MUSCAT// Oman has used $300 million (Dh1,1bn) out of its $2 billion support fund to help local banks and was unlikely to use the rest as the economy is recovering, its central bank governor said on Saturday. Hamood Sangour al Zadjali made the remarks to reporters on the sidelines of the Gulf Cooperation Council meeting in Oman's capital. The central bank allocated about $2bn to local banks to provide dollar liquidity last November as the global credit crunch took a hold, freezing lending.
"A small amount of the $2bn has been used... about $300 million," Mr Zadjali said. "$1.7bn is still available. I don't think it would be drawn down." The central banker said that Oman's economy was recovering, limiting the need for entities to access the funds. "The global financial crisis is receding and the activities are coming back to normal soon," Mr Zadjali said. "Since our banks aren't dependant on foreign markets, I don't think there'll be much demand, but we are still keeping this as a buffer."
The banking sector in Oman, which also set up a $390-million marketmaker fund last February, has been relatively shielded from the global financial crisis. However, the country's banks have faced a risk closer to home with two lenders ? Bank Muscat, the country's biggest, and National Bank of Oman ? saying they had exposure to troubled Saudi conglomerates Saad Group and Ahmad Hamad Algosaibi which are in the midst of a massive debt restructuring.