Oman is considering the issuance of a Eurobond in the first half of 2016, according to Hamoud Sangour al-Zadjali, governor of the Central Bank, speaking on Saudi Arabia’s Al-Arabiya television.

He did not give details or the size of the issuance, Reuters reports.

Al-Zadjali plans to issue RO600m ($1.56bn) of domestic debt in 2016. The first RO100m issuance is already underway.

The remainder will be issued on international markets as Omani banks have limited capacity and liquidity. This will help avoid crowding out private sector lending.

Muscat also closed a $1bn sovereign loan from international banks in early January. It plans to borrow a total of $5-10bn this year.

Despite cutting spending by 11 per cent in 2016, Oman expects to run a budget deficit of RO3.3bn or 13 per cent of GDP. The deficit could widen if oil prices remain lower than projected.

Zadjali told MEED in 2015 that he planned to issue RO600m of debt that year, of which RO200m on international markets. In the event RO750m was issued on the domestic market, including RO250m in Islamic bonds, or sukuk.