The Omani central bank's foreign assets fell to a five-year low in July as a deficit in goods and services trade continued to drain the country's external reserves, central bank data showed on Thursday. The assets, including gold bullion, slipped to OMR5.92 bn (USD15.4bn), down 18.2% from a year earlier and 3.5% lower than their level in June. The ratio of Oman's external government debt to gross foreign exchange reserves jumped to 70% in 2017 from 36% in 2016 and 6% in 2015.
Gross foreign exchange reserves, which include assets such as the holdings of Oman's sovereign wealth funds as well as the central bank's reserves, totalled slightly over 12bn rials at the end of last year, according to the report. Pressure on the reserves has decreased this year as a partial rebound of oil prices has shrunk Oman's state budget deficit, reducing the need to run down the reserves to cover the deficit. However, the current account is continuing to drain foreign exchange reserves. Although the Brent oil price has climbed to near USD80 a barrel this year, Oman would need oil prices to average USD84.1 in 2018 to eliminate its current account deficit, the International Monetary Fund has estimated.