Qatar Central Bank will begin the implementation of its reduction strategy for its support packages.
Qatar’s Central Bank (QCB) said it will soon gradually start reducing financial support measures that were introduced as a catalyst to lift the Gulf nation’s economy after it took a hit during the Covid-19 pandemic.
“QCB will begin with the implementation of the future strategy for a gradual reduction of the exceptional support stimulus packages that it launched,” said the bank in a statement.
This will be implemented “through a gradual and deliberate exit that takes into account the various interaction between monetary policy measures and the continuity of economic and banking activity in the State of Qatar,” the central bank said.
Qatari authorities were able to provide a support package of 75 billion riyals, or about 14% of gross domestic product (GDP), in response to last year’ downturn of which 50 billion riyals was central bank liquidity support.
The bank said the local financial and banking system was stable and domestic liquidity high, which means a reduction in support packages can be carried out.
Ratings agency S&P Global Ratings affirmed its ‘AA-(minus)’ rating of Qatar last month, saying that the Gulf country’s fiscal and external buffers were able to mitigate the risks deriving from “a rapid growth of foreign debt in the banking system.”
QCB also recently approved a $50 billion merger between Masraf Al Rayan QPSC and Al Khalij Commercial Bank (al khaliji) PQSC.
It issued its final approval on the merger between both banks after Al Khalij shareholders approved the bank’s dissolution for merging it with Al Rayan last month.
The merged entity is considered the second largest Islamic banking entity in Qatar, CNBC Arabia reported.