Muscat – The sultanate repaid US$1.5bn – part of government loans – ahead of due repayment date, which helped reduce interest rate for some loans through negotiations with lenders. Besides resulting in lower financing cost – compared to current rates – this development also confirmed the financial stability of the sultanate.

The early loan repayment came within the framework of continuous review of the lending portfolio and the financing costs associated with it, besides the government’s determination to reduce public debt by taking advantage of the additional revenues generated as a result of the rise in global oil prices.

In the first quarter of 2023, the government was able to settle a number of obligations estimated at about RO1.1bn, without resorting to re-borrowing in order to finance these.

The government repaid loans bringing the volume of public debt down to about RO16.6bn at the end of March 2023, compared to RO17.7bn at the end of 2022.

The Ministry of Finance stressed that the measures taken will lead to achieving more savings in the cost of servicing public debt, and benefits accruing from financing, estimated at about RO385mn, enabling the government to utilise these savings in priority sectors.

The Ministry of Finance stated that the government aims to reduce the burden of public debt, manage risks of lending portfolio, and reduce potential pressures of financing obligations in the coming years through early repayment of some loans.

These measures will reduce the burden of future public debt in light of the high interest rates applied by the US Federal Bank, in addition to improving the indicators of the credit rating of the sultanate.