DUBAI: Oman plans to borrow between $5 billion and $10 billion from abroad to help finance a budget deficit caused by low oil prices, central bank executive president Hamood Sangour Al-Zadjali told Al Arabiya television.

Al-Zadjali said the government might issue eurobonds by the middle of this year, but did not comment on the size of any euro bond offer or give further details of the foreign borrowing plan.

He also said the government planned to issue 600 million rials ($1.56 billion) of domestic bonds this year, or about 100 million rials every two months.

It is currently marketing a 100 million rial, five-year issue with a coupon of 3.5 percent; the bonds will be auctioned on Feb. 16.

The borrowing plans underline the heavy financial pressure which Oman faces because of cheap oil; the government has not issued an international bond since 1997.

Last month, Oman obtained a $1 billion sovereign loan from international banks.

Financial Affairs Minister Darwish Al-Balushi said in January that the government planned to cut its budget deficit to 3.3 billion rials this year from an actual 4.5 billion rials last year, partly through big spending cuts.

The government has decided to borrow abroad to reduce pressure on the local banking system, where money market rates have been rising as inflows of new oil revenues decrease.

A central bank auction of 91-day Treasury bills in late January fetched a weighted average yield of 0.844 percent, up from 0.201 percent at a similar sale in March last year.

Arabiya quoted Al-Zadjali as saying the central bank’s foreign reserves were sufficient to cover about four months of imports.

Its foreign assets and gold totalled 7.09 billion rials in November, up 8.3 percent from a year earlier, the latest official data shows.

In addition, Omani sovereign wealth funds are believed to have about $20 billion of assets, much of them held overseas, which could be sold to obtain foreign exchange if needed.