Doha: Qatar Central Bank (QCB) Governor H E Sheikh Abdulla bin Saoud Al-Thani said Qatar has financial surpluses, be it the central bank's reserves or the sovereign fund, are more than sufficient to live with the siege indefinitely, revealing the stability of the liquidity position in the end of 2017, and its improvement in 2018 as energy prices increased gradually.
Speaking to Lusail Newspaper, the Governor highlighted the strength and flexibility of the Qatari economy. The adequacy of the State's international reserves, in general and that of the central bank in particular, is the surest guarantee of the stability of the exchange rate of the Qatari riyal against the US dollar, which reflects the strength of the riyal and the robustness of the reserves supporting it, the Governor said.
He added that the current account surpluses in the State's payments' balance supports this reserves, pointing out that the volume of the international reserves at QCB is good and consistent with the international ratios. In addition, the size of the foreign currency reserve at the bank is excellent and covers the market needs, he added.
The Governor said investigations related to the siege countries' attempts to manipulate with the national currency and sovereign bonds are continuing, explaining that the investigations are being handled in cooperation with the Public Prosecution and the competent security services where the results will be disclosed as soon as the investigation concludes.
He added that QCB took all the required measures and procedures to defend the national currency and to face the siege through close monitoring of the developments of the crisis, preparing for it by all means available, and addressing the rumors that harmed the economy, especially the financial sector.
The Governor said the QCB permanently establish an "emergency committee" to follow up on the work procedures in banks, to ensure their commitment to global standards and to ensure the implementation of the central banks guidelines related to capital adequacy and liquidity.
He added that QCB takes many measures in this direction including holding periodical meetings with CEOs of banks in the country, supervising daily liquidity levels and cash transfers in the banking system, performing stress tests assuming worst-case scenarios, observing closely movement of foreign currency deposits and transactions and setting emergency plans to face any possible threats.
The Governor added that the total assets of 18 banks operating under the supervision of QCB, including seven branches of foreign banks amounted to nearly QR 1373.9 billion at the end of 2017 as opposed to nearly QR 1271.7 billion at the end of 2016, an increase of nearly QR 102.2 billion and 8 percent.
He also revealed that property rights of these banks reached about QR 151.8 billion at the end of 2017 compared to about QR 140.4 billion at the end of 2016, an increase of QR 11.4 billion and 8.1 percent. In addition, profits achieved at the end of 2017 were nearly QR 19.7 billion compared to about QR 19.0 billion at the end of 2016, an increase of about QR 700 million and 3.7 percent.
The Governor said the total volume of issuance (treasury bills, bonds and sukuk) issued by QCB last year was QR 47.5 billion, of which QR 13.55 billion were treasury bills, while the rest were bonds and sukuk (QR 18.475 billion bonds and QR 15.425 billion sukuk). He expected that the issuance of bonds and sukuk will continue during the current year through a quarterly program and treasury bills will continue to be issued on a monthly basis.
With regard to the commitment of the financial institutions in the country to the principles of governance, in particular those relating to combating money-laundering and the financing of terrorism, the Governor stressed that the QCB, out of its interest in governance, issued the first edition of corporate governance for banks in 2008.
The bank improved and updated the instructions more than once, most recently issuing comprehensive instructions in July 2015 that are consistent with the latest international practices in this field, such as the OECD and Basel Rules for Banking Supervision and others, he said.
He said that these instructions include a special section for Islamic banks, and the QCB is verifying banks' commitment to these instructions through continuous monitoring and inspection of banks and financial institutions that comply in general with the bank's instructions.
He stressed that Qatari banks were among the first banks in the region to implement the requirements of Basel II and Basel III in response to QCB's instructions issued as soon as international standards were released taking into consideration the local environment when issuing the implementation instructions. The current status and the banks' compliance with the aforementioned requirements indicate that they are ready for the implementation of Basel IV, but the final decision will be after the issuance of the standard in its final form and after adequate study as there are procedures for the QCB to deal with international standards, he said.
The Governor said that insurance companies are one of the most important pillars of the financial sector, pointing out that there are 12 companies operating to meet the insurance needs, including five national companies listed on the Qatar Exchange.
He added that the insurance sector has seen a remarkable growth during the last decade, and that growth accelerated in the past five years. The premiums of the insurance companies operating in the country and supervised by the Qatar Central Bank increased to QR12.6 billion in 2016 compared to QR11.3 billion in 2015, reflecting the growth in insurance activity.
He pointed out that all the exchange companies operating in the country have strong financial position with total assets of QR1.9 billion at the end of 2017, a growth of 27 per cent compared to 2016, adding that there are opportunities for further growth during 2018 in light of the economic development of the country.
Sheikh Abdullah pointed out that the QCB is in direct contact with the money exchange outlets to identify their daily needs of foreign currencies to meet that, and it also worked in coordination with the relevant authorities in the State (Ministry of Interior, General Authority of Customs) to facilitate the procedures of importing currencies from abroad and to remove any restrictions or obstacles to the importation of those currencies.
