Oman has formed a financial stability committee to monitor and manage risks in the banking and capital markets, Reuters has reported. The new Supreme Committee for Financial Stability includes the CEO of the Capital Market Authority, representatives from the Finance and Commerce & Industry ministries, and the head of the central bank’s financial stability unit.

The committee will study risks and coordinate authorities’ fiscal and monetary policy and prudential supervision, as well as the actions of regulators and supervisors.

In January, Oman announced it will raise public spending at a slower rate in 2014, in a bid to address looming fiscal challenges. Government spending under the country’s newly approved budget amounts to about RO13.5bn ($35.1bn), marking an increase of 5 per cent on last year’s spending.

Last May, the Washington-based IMF warned that Muscat needs to curb spending and boost non-oil revenue in the medium term, or run the risk of having its economy slide into deficit.