BankMuscat of Oman and Arab Trade Financing Programme (ATFP) have signed an agreement to open a US$35 million line of credit to finance exports from Oman.

The agreement was apparently signed during the World Bank and International Monetary Fund (IMF) annual meetings held in Dubai last month.

L/C services

BankMuscat's trade finance services include opening letters of credit (L/Cs), guarantees and standby L/Cs, import finance, export finance and documentary collections.

Several of the bank's trade finance facilities are now migrated from paper to online environments. BankMuscat's eTrade currently offers import and export L/Cs electronically. The bank aims to launch further online services including documentary collections and letters of guarantee shortly.

Existing L/C support

Last year BankMuscat agreed to participate in a trade finance scheme with the Eastern and Southern African Development Bank, best known as PTA Bank. The two parties signed a US$5 million line of credit agreement.

Under this funding arrangement, BankMuscat will confirm and refinance L/Cs involving the export of goods, both capital and consumables, by Omani exporters. The line of credit covers export and re-exports from Oman to eastern Africa.

Free trade objectives

The credit line with BankMuscat is the fourteenth one provided by the ATFP to Omani agencies and makes the total volume of credit it has extended to Oman worth US$276 million.

"We provide support to the Arab economies in their efforts to promote trade exchanges and in achieving economic integration. Our services are in line with the objectives of realising an Arab Free Trade Area," chief executive chairman of the AFTP, Dr Jassim Al Mannai said at the launch of the new credit agreement with BankMuscat.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.