Due to persistently low oil prices Oman's banking system continues to remain vulnerable and the operating environment for banks is expected to weaken further, Moody's Investors Service said. The impact of low oil prices on GCC banks' standalone profiles has so far been most acute in terms of more challenging liquidity conditions, reflecting increasing government borrowings, reduced deposit inflows and rising interest rates, Moody's said in a report released on Wednesday.   “We expect these developments to impact Omani banks' funding, profitability and ultimately asset quality in 2016. At the same time, the government's fiscal pressures mean the capacity and willingness to support the banking system is declining as well,” the ratings agency said. Overall yearly deposit growth at banks in Oman has slowed to around 3%, Moody's said, adding, “but the government has consciously kept its level of deposits in the system stable at around 32% to help maintain liquidity.” As a result, Moody's said the loans-to-deposits ratio for Oman's banking system has been broadly stable at 98%. (Muscat Daily)