Oman’s Ministry of Finance announced plans this week to tap the bond market to the tune of OR550mn ($1.43bn) following a $2bn bridge loan earlier this year in order to cover government spending. Bank Muscat will arrange the issuance of the local sukuk – its third issue of the ‘sovereign sukuk program’ –which the ministry says will target “small investors” and “is part of the government’s strategy to deepen and expand the capital market in order to facilitate local economic growth.”

The move also indicates the extent of the sultanate’s current financial predicament. The government cut its 2020 budget by $1.3bn to $33bn along with other cost reduction mechanisms in April to cope with lower oil prices, but this is nowhere near enough to stave off what will likely be the largest budget deficit in Oman’s history this year – potentially as high as $14bn. (CONTINUED - 626 WORDS)