Doha: The total international reserves in foreign currency of Qatar Central Bank (QCB) continued to grow for the 25th consecutive month in February, to reach QR200.6bn.
A detailed reading of QCB’s latest data by Al Byraq Center for Economic and Financial Studies, noted that the official reserves of Qatar Central Bank increased by the end of February by about QR1.6bn to QR147bn or $40.3bn, and the total international reserves, including liquidity in foreign currency, rose by QR1.2bn to reach about QR200.6bn. The international reserves increased by QR63.8bn, or 46.6 percent of what it was two years ago in February 2018, and rose by 11.1 percent from a year ago.
Bashir Al Kahlout, Economic Consultant and Director of Al Byraq Center for Economic and Financial Studies commented that the rise in the official reserves was mainly due to the rise in the bonds and treasury bills by about QR1.1bn to QR81.9bn; and the rise in balances with foreign banks by about QR500m to QR55.4bn. The value of gold increased by about QR150m to QR7.88bn, in addition to the stability of special drawing rights deposits with the share of Qatar in the IMF reaching at the level of QR1882m.
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, there are other liquid assets in foreign currency.
An year-on-year comparison shows that QCB’s international reserves and liquidity in February 2020 increased by 10.8 percent or about QR19.5bn. The breakdown shows QCB’s portfolio of foreign bonds and treasury bills increased by about QR37.5bn or 84.2 percent. The bank balances with foreign banks decrease by about QR3.4bn or 5.8 percent. The bank’s gold holdings increased by about QR1.6bn, or 25.5 percent.
Deposits of special drawing rights, and the state’s share in the International Monetary Fund, decreased slightly, at QR1.88bn. On the other hand, other liquid assets - other than official reserves - (i.e. deposits in foreign currencies) decreased from February 2019 by about QR15.4bn to QR53.6bn.
Available data 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”, Al Kahlout said.
