The Central Bank of Oman (CBO) on Thursday increased its repo rate for local banks at the rate of 25 basis points to 5.50%.

In a statement, the bank said that this decision was taken following the US Federal Reserve Board’s announcement on 22nd March 2023 to increase the Interest on Reserve Balances (IORB) by 25 basis points.

The repo rate is the policy rate that allows commercial banks to acquire short-term liquidity from the Central Bank as the lender of last resort. The CBO has cautioned banks not to increase the cost of borrowing to consumers given ample liquidity in the system.