Central Bank of Oman Launches Composite Financial Stability Indicator for Oman

Muscat: The Central Bank of Oman (CBO) announced the publication of a working paper unveiling the first ever Composite Financial Stability Indicator (CFSI) for the Sultanate of Oman.

The CFSI serves as a comprehensive measure to capture the essence of financial stability in the Sultanate of Oman, providing stakeholders and policymakers with valuable insights into the current state and evolution of financial stability over time.

The CFSI aggregates five essential sub-indicators that effectively reflect the financial stability landscape in Oman, with the aggregate CFSI rated on a scale of 1 to 5, with 1 representing lower stability and 5 higher stability. These sub-indicators include Banking stability, systemic risk, debt sustainability, currency stability and capital market certainty.

The #CentralBankOfOman launches of a methodology for calculating an indicator that measures the degree of financial stability in the Sultanate of Oman | 📊

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— البنك المركزي العماني (@CentralBank_OM) July 3, 2023

The overall results of the CFSI from 2008 to 2021, demonstrates strong stability. However, during the early stages of the pandemic, the CFSI of Oman saw a drop primarily attributed to deteriorating debt sustainability, capital market deterioration, and increased systemic risk resulting from the contraction of economic activity vis a vis bank lending and higher lending premiums during the pandemic period.

The CFSI will be updated annually and made available to the public through the annually published Financial Stability Report, with the objective of enhancing transparency and ensuring that vital information reaches a wide range of stakeholders.

With the introduction of the CFSI, the CBO reiterates its commitment to transparency, open communication with stakeholders, and evidence-based policy making. – ONA