Qatar has reiterated there is no going back on its currency’s peg to the US dollar and said the riyal’s rate to the greenback is to be maintained at QR3.64.
Local banks and exchange houses involved in foreign exchange dealings must use this rate with a margin of 0.24 percent. While converting the riyal to other currencies, they must use the above riyal-dollar rate as the basis of those conversions.
“The riyal’s peg to the dollar is the cornerstone of the country’s monetary policy,” said banking regulator, Qatar Central Bank (QCB).
The QCB has reminded the local banking industry that their deposits with it are a guarantee that depositors’ rights will be protected in the eventuality of default. In other words, if a bank for some reason fails to return a depositor his money, the regulator would make sure he is repaid.
The QCB has also warned banks against exposure to speculative activities in stock trading and real estate transactions.
“We have banned lending to these two speculative activities, as also to stock trading even while it might not involve speculation, and put regulations in place in this regard,” the central bank said.
The regulations aim to help protect the rights of depositors, check inflation and maintain the stability of the banking and financial services sector. Banks must now play a proactive role to help the non-hydrocarbons sector to emerge on top and offset the slowdown in the oil and gas sector.The non-energy sector must be aided to expand he production base, the QCB said in its latest report.
But figures released by the regulator until last June show that banks’ lending to individuals, or consumer loans, rose by a considerable QR5.6bn ($ 1.53bn) in the month.
Banks’ total exposure to the above lucrative yet economically not-so-productive segment until last June was a whopping QR74.3bn, or $ 20.4bn.
Sadly, there was only a marginal rise of QR100m in the credit dispensed to the industrial sector in June 2013, with the total being QR10.2bn ($ 2.8bn).
This sector is the key to expanding production base, but it remains neglected.
Loans to the services sector also rose, by a relatively higher margin of QR4.3bn ($ 1.18bn) in the month under review, adding up to QR42.3bn ($ 11.61bn).
There was a slight fall of QR200m in credit given away to the real estate sector, but it continued to be the largest borrower, with total exposure to the sector being a staggering QR97bn ($ 26.63bn) until June.
A highlight has been a reduction in banks’ exposure to the government and quasi-government sectors. But overall banks’ lending grew 15.5 percent in a year until last June, Al Sharq reported yesterday.-The Peninsula
