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Qatar to raise deposit rate to 2.50% in December – Report

Qatar to raise deposit rate to 2.50% in December – Report
Qatar is projected to increase the deposit rate to 3% by 2019

Mubasher: Qatar is expected to raise the deposit rate to 2.50%, or by 25 basis points by the end of this year, according to Capital Economics’ recent report.

The Gas-rich country is projected to increase the deposit rate to 3% by 2019, but it will plunge to 2.25% by the end of 2020, the London-based economic research consultancy said.

In March, the Qatar Central Bank (QCB) raised the interest rate for the first time in 2018 following the US Federal Reserve’s decision.

The central bank increased the rate by 25 basis points to 1.75% from 1.50%.

The US Federal Reserve Bank has increased interest rates by 25 basis points or 0.25% to a range of 1.50% to 1.75%, marking the first of three or four anticipated rate hikes.

Several GCC members raised interest rates on the back of the Fed’s move including Kuwait, Saudi Arabia, Bahrain, and the UAE.

The report stated that the exchange rate of Qatari riyal against US dollar is expected to record QAR 3.64 by 2020.

On the other hand, the GCC country's gross domestic product (GDP) is expected to grow by 3.3% during 2018, while inflation is forecast to inch up to 0.5%, Capital Economics said.