Muscat, February 21: BankMuscat, the leading financial institution in the Sultanate, successfully closed its 5th Certificate of Deposit (CD) auction issue on February 15. The issue was oversubscribed to the extent of RO 16.103 million against the issue size of RO 15 million. The weighted average yields accepted were 4.62 per cent for one year while for three and five years no applications were received. The non-receipt of applications for longer periods reflects present market focus on liquidity management.

BankMuscat expects interest rates to soften further as the search for higher yields continues. The impact of the recently announced CBO measures is slowly reflecting on market yields. Softening global interest rates, fall in interest rates within the GCC and the weak global economic outlook are all exerting downward pressure on interest rates in Oman as well.

BankMuscat has accepted a total amount of RO 75.4 million of bids against the subscription of RO 123.3 million till the fifth auction. The Bank targets a total of RO 250 million from the CD issuance programme with a one-year timeframe. As per market sources, the monthly CD auction results of the Bank is providing guidance to the market on the interest rate trends in the economy.