QCB Governor Rules Out Raising Interest Rate Due to External Economic Situations

Doha, October 03 (QNA) - HE Governor of Qatar Central Bank Sheikh Abdullah bin Saud Al-Thani ruled out an interest rate hike in the State of Qatar in case the US Federal Reserve decided to raise the interest rates in the United States. HE the QCB Governor explained that the current conditions of the Qatari banking system which is characterized by high liquidity, and the liquidity ratio provided by Qatar Central Bank to local banks, exclude the issue of raising the interest rate in case it was approved in the United States. Speaking during the "Dean's Lecture Series" organized by Carnegie Mellon University in Qatar, HE the QCB Governor said that the Qatari economy will not be affected by US Federal Reserve decision due to the high volume of reserves in the state, and due to the current interest rate. HE the Governor added in a press statement on the sidelines of the lecture that Qatar Central Bank holds an auction each month gives an indication of the liquidity needed by banks and determines the interest rate. The auction held last week showed a rise in liquidity, and a rise in the demand by banks to subscribe treasury bills. Speaking about the local rating agency which will be launched at the end of next year, HE QCB Governor said that the agency is considered the last stage in the development of the stock market. It will work on the classification of companies wishing to put up bonds and bills treasury, in order to identify risks for each interested institution. Asked about the GCC common currency, HE the Governor underlined that the GCC countries agree on 90 percent of monetary, fiscal and financial policies. During the lecture, HE the Governor stressed Qatar strong economic performance and said that the growth will continue at a moderate pace, despite the drop in oil prices, indicating that the real GDP growth rate reached 6 percent in 2014. He noted that the State has a resilient financial sector, and a good liquidity within its banking system, where banks are still enjoying a good and profitable capitalized with high-quality assets, pointing out to the continuing high credit rating of the State of Qatar, rated 'AA' by Standard & Poor's with a stable outlook, and classified with a 'Aa2' degree with a stable outlook by Fitch. He underlined that the role of Qatar Central Bank is to support growth, and maintain a low and stable rate of inflation, and low interest rates in the country. It is also working to support economic diversification, in addition to promoting financial stability, and to ensure adequate liquidity in the banking system in order to make it in a healthy condition characterized by quality and flexibility. (QNA)