Qatar will act to maintain liquidity if required

2/7/2016 11:33:56 PM

(MENAFN- Khaleej Times)

Authorities in Qatar will use fiscal policy and money market operations if needed to prevent low oil and gas prices from causing a liquidity crunch in the banking system the governor of the central bank (QCB) was quoted as saying.

Money market rates have risen sharply as flows of new oil and gas revenue into the system have decreased over the past year and as the Qatari government has borrowed to fund an emerging budget deficit.

The three-month Qatar interbank offered rate is at 1.37 per cent up from around 1.07 per cent a year ago. In an interview published by international research firm The Business Year Shaikh Abdullah bin Saud Al Thani said the central bank was still pursuing an "easy monetary policy stance" and that he did not think liquidity had become tight.

"Although the drop in oil prices has induced a fall in export earnings and government revenues and consequently government deposits banking systemic liquidity has been comfortable so far partly reflecting QCB's active liquidity management operations" he said.

Shaikh Abdullah also told The Business Year that he expected oil prices to recover in the coming year.

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