Qatar sovereign fund deposited dollars in local banks as precaution -bankers | Reuters

* Banks don’t need dollar liquidity at present

* Deposit withdrawals have been minimal, banker says

* But government acts in case of withdrawals in coming
months

* Ready to provide more dollar or riyal liquidity

* Central bank remains committed to peg – banker

By Tom Arnold and Tom Finn

DOHA, June 20 Qatar’s sovereign wealth fund made
U.S. dollar deposits in some local banks last week as a
precaution after Saudi Arabia and other Gulf states cut
diplomatic and transport ties with Doha, Qatari commercial
bankers said.

One Qatar-based banker, whose own institution received
funds, said new deposits in the banking system by the Qatar
Investment Authority (QIA) at the end of last week were believed
to total several billion dollars. He described the deposits as
“pre-emptive”.

At a recent meeting between top commercial bank executives
and central bank officials, the executives said they did not
need dollar liquidity at present, the banker told Reuters,
declining to be named because of commercial sensitivities.

But if the diplomatic crisis lasts another three or four
months, and Saudi Arabian and United Arab Emirates banks pull
their deposits out of Qatar, local banks might need official
help, the banker said.

The QIA declined to comment. Asked for comment, a central
bank official told Reuters:

“QIA regularly place deposits in local banks – this is
normal. Contrary to media reports, there haven’t been big
withdrawals from banks in Qatar, and the embargo is only having
a limited effect on the banking sector here, and one that is
easily manageable.”

Qatar’s banks became dependent on foreign funding during the
last few years of strong economic growth. Their foreign
liabilities increased to 451 billion riyals ($124 billion) in
March from 310 billion riyals at the end of 2015.

Yousef al-Jaida, chief executive of the Qatar Financial
Centre, said this week that institutions from Saudi Arabia, the
UAE and Bahrain had…

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