OMAN CENTRAL BANK TO ISSUE TREASURY BILLS
Oman's central bank is expected to
announce shortly the go-ahead for a weekly offering of treasury
bills to the sultanate's 22 local and foreign banks, banking
sources in Muscat said.
    The central bank's board is due to approve the scheme at
its next meeting on June 7 and it is likely to be explained to
banks at a meeting with general managers scheduled for June 14,
the sources said.
    The decision to issue short-term government paper will come
as a relief to banks in Oman which have been awash with
liquidity but have few outlets for investment.
    Oman's banks are allowed to swap only 40 pct of capital and
reserves into foreign currencies, effectively preventing them
from investing excess funds in eurodollar deposits where yields
are much higher than in the domestic interbank market.
    A treasury bill system would go some way to meeting banks'
complaints on this score, bankers in Muscat said. Their
dissatisfaction is expected to be voiced at the June 14 meeting
if the treasury bill scheme is not launched.
    Bahrain introduced a weekly treasury bill tender last
December, offering local banks two mln dinars in 91-day bills
by tender each Tuesday.
    Other nations in the Gulf also offer banks short-term
paper, with the United Arab Emirates issuing certificates of
deposit each week while Saudi Arabia offers "bankers' security
deposit accounts."
    Both the Bahrain treasury bills and Saudi Arabian deposit
accounts can be used by banks in repurchase agreements to
obtain short-term money market aid.
    Bankers in Muscat said the format of Oman's treasury bill
offering is not yet clear. Some expect a maturity of 91-days,
similar to Bahrain.
 REUTER
