Qatar Central Bank: (QCB)
Qatar Central Bank was established in 1993 with a mandate to work in the field of issuing currency and act as the bank of the government and the bank of banks in addition to its main task of managing the monetary policy of the State. The bank's capital has been raised to QR500 million.
In its management of the monetary policy in the second half of 2007, QCB faced a difficult situation: first, it had to reduce the rate of interest by 115 base point to 4% at the time that the data of Qatar economy had indicating a robust growth and the increase in inflation rate were pushing towards raising the rate.
Second, QCB maintained the exchange rate of QR in spite of the sharp decrease in the exchange rate of the US Dollar and the financial pressures exercised on the bank to raise the exchange rate of QR. In face of such exceptional pressures QCB moved towards curbing credits that are provided by banks and reducing size of surplus liquidity with them by taking the following actions:
1. reducing the interest rate of deposits through the Qatari monetary market mechanism.
2. The bank decided to raise the compulsory reserve ratio to 3.25% for restraining part of surplus liquidity with the banking sector.
3. Planning for the issuance of deposit certificates in QR for various periods to further absorb the surplus quantities of liquidity.
4. Pointing out clearly to the banking system and to the international financial market that there is no intention for raising the exchange rate of QR.
These efforts gave fruit in reducing the growth rate of local liquidity for the second consecutive years and fixing inflation rate at 13.74% for the second quarter of the year consecutively.
QCB continued its efforts preserving the integrity and the stability of the banking system by taking precautionary actions and controlling over banks. The total assets growth rate increased at the end of 2007 to 55.3% compared to 45.9% at the end of 2006, in addition to securing high growth rate in its major activities in accepting customers deposits, the growth rate of which reached to about 38.8% at the end of 2007, compared to about 41.1% at the end of last year. Also banks increased their credit facilities by the rate of 42% at the end of 2007 compared to 44.5% at the end of last year.