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Oman can defend its currency peg, central bank governor says

Oman can defend its currency peg, central bank governor says

Muscat: Oman has the means to maintain its currency peg and has no plans to change it even though the decline in oil prices has hurt its finances, central bank Governor Tahir Al Amri said.
Oman’s gross foreign currency reserves, which stood at $19.6 billion (Dh71.9 billion) at the end of January, are enough to cover nearly nine months’ worth of imports, Al Amri said in an interview Tuesday at his office in the capital, Muscat. Oil remains the country’s biggest export, and most of the country’s revenue is in US dollars, he added.

“We are strongly behind the peg” despite pressures, Al Amri said. “We will try and make sure that we have ways and means of defending our fixed exchange-rate policy.”

The finances of the Middle East’s biggest non-Opec oil producer, like those of others in the six-nation Gulf Cooperation Council, were battered after the plunge in crude prices beginning in 2014. With income from exports falling sharply and the budget gap widening, the country borrowed heavily to finance imports and cover the sizeable outflows from foreign worker remittances.