By: Eman Ghali
Mubasher: The Qatar’s Central Bank (QCB) has faced a tough year in which it made a slew of important decisions topped by rising interest rate three times, legal investigation into manipulating Qatar's currency after the riyal had dropped to QAR 3.80 against dollar, hitting its the lowest level since 1988
After four Arab countries cut their diplomatic and trade ties with Doha in June 2017, the Qatari economy, the private sector in particular, has faced a liquidity crunch on the back of outflow of foreign capital.
This propelled the central bank to support the local currency and the banking sector.
Currency support
Over the course of 2017, QCB has made key decisions. On 19 December 2018, Qatar’s central bank Sheikh Abdullah bin Saud began a legal investigation into attempts to harm the economy of the world’s biggest exporter of liquefied natural gas by manipulating and undermining the currency, securities and derivatives markets.
QCB announced it would continue its support to shore up the riyal.
In a bid to overcome the outflow of foreign capital from Qatari banks, the central bank decided to increase the public sector’s deposits through withdrawing from Qatar’s sovereign wealth fund’s deposits.
QCB’s $340 billion reserves could boost the local currency and achieve monetary policy objectives, bin Saud added.
Ali Shareef al-Emadi, Qatar’s finance minister, previously announced that Doha had withdrawn around $20 billion from the sovereign wealth fund in order to ease repercussions of the Gulf rift and provide liquidity at Qatari banks.
The QCB’s foreign reserves declined to QAR 131.47 billion ($36.11 billion) in October 2017 from QAR 168.15 billion ($46.19 billion) a year earlier.
Raising interest rate
Between March and December 2017, the QCB rose key interest rates three times in line with the US Federal Reserve’s interest rate hike.
Financial sector's 2nd strategic plan
The Central Bank of Qatar launched the Second Strategic Plan for the financial sector regulation (2017 - 2022).
MOUs
In May 2017, the QCB inked a memorandum of understanding (MoU) with Bangladesh Bank in an effort to bolster cooperation in the banking sector, as well as exchanging information, expertise and training.
By the end of November 2017, the central bank of the world's wealthiest country per capita signed a MoU with its Turkish counterpart to enhance relations and cooperation between Doha and Ankara, in addition to arranging joint events such as conferences, workshops and temporary employment fairs.
Translated by: Kholoud Mohamed Hussein
