Qatar Central Bank’s international reserves continue to grow

Qatar Central Bank data released yesterday showed a continued growth of the total international reserves in foreign currency of the Qatar Central Bank reaching QR198.4bn by the end of December 2019.

Official reserves consist of four main components, foremost among which are: bonds and foreign treasury bills, deposits and cash balances with foreign banks, central bank holdings of gold, deposits of special drawing rights, and the State of Qatar’s share with the International Monetary Fund.

In addition to the official reserves, other liquid assets are added in foreign currency, so that the total of the two together constitutes what is known as the total international reserves.

The official reserves of Qatar Central Bank increased by about QR0.5bn by the end of December, compared to previous month, reach about QR144.3bn (or $ 39.6bn).

The total international reserves increased, with liquidity in foreign currency at the bank at the end of December by about QR0.8bn to reach about QR198.4bn ($54.4bn), and thus increased by about QR61.5bn, or 44.9 percent of what it was in a month December 2017, as well as increased by December 2018 by 10.6 percent.

The month-on-month increase in International reserves in December was due to the increase in Qatar Central Bank’s balances of deposits with foreign banks by about QR1.74bn, to reach the level of QR54.65bn. The value of gold increased by QR253m to QR7.49bn. The stocks of foreign bonds and notes decreased by QR415m to QR80.3bn, and the special drawing rights deposits’ balances remain stable with a slight increase to the level of QR1898m.

On year-on-year, the international reserves and liquidity of the bank witnessed an increase of about QR19bn, or 10.6 percent to QR198.4bn. This increase was distributed among some components of the international reserves of the bank, as follows: 1. The bank’s portfolio of foreign bonds and treasury bills increased by about QR25.5bn, or 46.5 percent.

2. The bank balances with foreign banks increased by about QR5.6bn, or 11.4 percent.

3. The bank’s gold holdings increased by about QR2.8bn, or 60 percent.

4. The stability of special drawing rights deposits, and the state’s share in the International Monetary Fund, with an increase of QR14m to QR1.90bn.

On the other hand, other liquid assets – other than official reserves – (i.e. deposits in foreign currencies) increased from December 2018 by about QR284m to QR54.1bn.

Available comparisons indicate that the Qatar Central Bank has significant international reserves and liquidity in foreign currency, which has made it in a very comfortable position, enabling it to maintain the stability of the Qatari currency, no matter how subjected to pressure. We note in this regard that these reserves and liquidity in foreign currency are equivalent to more than eleven times the cash issued, or more than 1100 percent, while the law of the bank requires that this percentage not be less than 100 percent only. It is also noted that these reserves are equivalent to more than twice the reserve money – or what is known as the monetary base – as its coverage ratio is more than 234 percent.

Source from: The Peninsula