Central Bank of Oman Lowers Repurchase Agreement Rate for Local Banks

The Central Bank of Oman (CBO) announced that it has reduced its Repurchase Agreement (repo) rate for local banks by 25 basis points, bringing it down to 4.50%, effective Thursday, October 30, 2025. 

This rate cut aligns with the bank’s overarching monetary policy framework, which revolves around maintaining the Omani rial’s fixed exchange rate peg to the US dollar. By doing so, the CBO aims to preserve currency stability, prevent irregular cross-border capital flows and bolster investor confidence in the Sultanate’s economy. 

By lowering the cost of funding available to banks, the move is designed to cascade into the broader economy: cheaper borrowing for banks means potential for increased credit supply, lending growth to businesses and households, and a boost to investment and consumption—particularly in the non-oil sectors that the economy is seeking to diversify. 

Furthermore, the decision reflects the close alignment of Oman’s monetary policy with global interest-rate developments, especially in the Gulf region, where currency pegs to the US dollar play a crucial role. Other central banks in the Gulf Cooperation Council (GCC) have taken similar steps following the Federal Reserve’s rate adjustments. 

For the business community and investors in Oman, opportunities are likely to arise: sectors sensitive to financing costs—such as real estate, manufacturing, tourism and infrastructure—stand to benefit from improved liquidity and lower interest burdens. At the same time, borrowers should still remain cautious of the broader macro context: inflationary pressures, currency movements and regional economic dynamics remain relevant risks.