The economists and financial analysts have been discussing the various factors which influence the credit policy and volume of credits by commercial banks. The commercial banks are playing an eminent role in the development and growth of a country’s economy. The contribution of commercial banks in economic development through financial intermediary function is considered as pertinent and significant especially in developing economies where the capital market and financial institutions are not much developed. The commercial banks enhance the consumer’s purchasing ability through consumer loans and they finance corporates also. The credits offered by commercial banks are influenced by various internal and external factors. Among the external factors, the key economic factors such as Consumer Price Index, Government Expenditure, Interest Rates and Money Supply are important. The current research aims to study the impact of these key economic indicators on the total credits offered by the conventional commercial banks in Sultanate of Oman. The data relating to the selected variables has been collected for 50 months from Central Bank of Oman Monthly Statistical Bulletins. The results of the study show that the Macroeconomic indicators have positive impact on the total credits offered by conventional commercial banks in Sultanate of Oman.
Consumer Price Index, Government Expenditure and Support to Private Sector, Weighted Average Interest Rates and Money Supply