Qatar Central Bank (QCB) yesterday published the 43rd Annual Report for 2019, and its 11th Financial Stability Review (FSR)-2019.
According to a press release published on QCB website, the annual report discusses the most important macroeconomic and financial developments during the year. The report also provides the annual financial statement of QCB and important policy measures taken by QCB during 2019.
With further slowdown in the global economy leading to lower demand and prices for energy, Qatar economy showed a mild contraction in real terms during 2019. However, non-hydrocarbon sector continued to expand, although at a slower pace than the previous year. Deflationary situation prevailed during most part of 2019 driven by few sectors such as rent, recreation and culture, transport, and communication, the report said.
Despite the fall in energy prices, there was fiscal and current account surplus during 2019. Coupled with strong capital inflows, BOP remained in surplus and there was significant accumulation of foreign exchange reserves, according to the report. QCB continued to pursue its mandated monetary policy objective of maintaining a pegged currency while ensuring a stable systemic liquidity. Accordingly, monetary and liquidity conditions were aligned with developments in domestic economy and external environment to ensure a comfortable systemic liquidity and facilitate adequate credit flows to productive sectors. In response to policy rates cuts by the US Federal Reserve during 2019, while giving due considerations to domestic economic conditions, QCB reduced the QCB deposit rate and QCB repo rate twice, and the QCB lending rate thrice.
QCB took several measures to enhance credit risk management, efficiency and security of the credit system and monitor the risk and vulnerabilities of the financial system. To improve the payment and settlement systems by moving to electronic modes, controlling risks and developing a sound payment infrastructure, QCB developed a new retail payment system, among others. QCB commissioned a new centralised information security department for overall supervision and development of the security strategy, and oversee the cyber security practice of the entire financial sector.
