Doha – Mubasher: Qatar's interbank rate jumped 230 basis points (bps) to its highest level in seven years, according to Qatari bankers.
The cost of interbank loans for three months surged to 2.2%, they said, noting that Qatari banks’ customer and GCC bank deposits amount to QAR 60 billion ($16 billion).
Moreover, around 25% of deposits in Qatari banks are foreign deposits.
The ratio of loans to deposits in Qatar is 100%, and may exceed that, which raises concerns in the event that they are withdrawn.
If liquidity decreases, Qatar’s banks are expected to take loans from the Qatar Central Bank (QCB) based on the repo rate.
The repo rate is a money-market instrument, which is often used to raise short-term capital. It is determined by the central bank of a country to control monetary supply and inflation.
In April, Qatari banks’ assets rose 2.3% month-on-month to reach QAR 1.31 trillion.
The value of bonds issued by Qatari banks abroad amounted to QAR 34.51 billion at the end of the first quarter of 2017, and reached QAR 871.48 million in Qatar.
Qatar’s banks depend on external financing by 35%.
Since last week, Qatar has faced several challenges following a diplomatic dispute involving Saudi Arabia, Bahrain, Egypt, and the UAE breaking their diplomatic ties with the Gulf state, accusing it of supporting terrorism. The Qatari riyal has since dropped against the US dollar.
