Amritha
May 27, 2018, 11:18 pm IST
×
News Updates


Economy



Economy
Qatar peg under stress

Qatar peg under stress

 Jun 26, 2017

Qatari Riyal (QAR), the state of Qatar’s currency, is under stress. The QAR is pegged to the USD at 1USD = 3.64QAR. The recent tensions in the region have taken a toll on the currency of the Middle East nation. While the central bank has not intervened directly in the international markets, the country has deep pockets to do so. Central bank data indicates that it had approx. USD 35bn as of May 2017 in International reserves. The country also has one of the largest sovereign wealth funds to fall back on, with estimated assets of USD335bn.

https://lh6.googleusercontent.com/AaZnkz7OjZo51p9Eps4PsEdrLJcnBKXfZz1ihIpRVGCIByjwRFAehVeT0c8MbsAba3fCYXIKfy9t8SuhYhnsjacF9u4lXJvNy2J9uQcWHuVb4rhxVBl-7vWNBP21X8F4RX8meJ4oOrQENbHsRQ

That said, if the impasse continues it is likely to put pressure on Qatar which is currently focussed on finishing extensive construction activity for the FIFA world cup in 2022. The current liquidity squeeze has already pushed Qatar’s 3 month interbank rate to upwards of 2.44% (less than 1.58% a year back).

Qatar’s central bank might look at direct intervention to improve liquidity in the system and support the peg internationally. The central bank might also impose capital controls. However, any revision in Qatar’s peg to the USD, will increase both domestic inflation and volatility in the FX rates of its neighbours.



More News











Pick of the Day

About us

In the surfeit of information that inundates us relentlessly, now (24 x 7 so to speak), it is difficult to separate the chaff from the grain. With so much chaff getting into the public domain, the real news happening on the ground becomes hard to make out. We are embarking on this portal in an effort to clarify things and provide focus on the real d ...

Read more

Newsletter

Enter email address to subscribe the newsletter

Copyright © 2017 PENNEWS. All Rights Reserved | Designed by : Tedsys