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01 March 2024

Qatar raises reserve requirement by 50bps

By Agencies
Qatar, which pegs its riyal to the dollar, plans to raise the reserve requirement for its commercial banks by 50 basis points as it seeks to control money supply and rising inflation.


"It is due on February 15," said a central bank official, who declined to be identified. "We are now in a period of calculating the reserves for each bank according to their deposits, which we will know by February 12 and then we will apply 3.75 per cent."


Qatar had raised the reserve requirement for the first time this decade in December by 50 basis points to 3.25 per cent to force banks to keep more money in their vaults to prevent lower borrowing costs from fuelling inflation.


Qatar cut its deposit facility rate by 50 basis points but left its benchmark lending rate unchanged on Thursday after a US rate cut a day earlier.


The Fed reduced its benchmark by half a percentage point on Wednesday, its second rate cut in eight days, as part of an ongoing effort to halt a slowdown in an economy hit by a housing slump and a credit crunch. (Reuters)