Qatar Central Bank’s (QCB) foreign exchange reserves continued to grow in October 2019 for the 21st month in a row, reaching QR197.23bn, Qatar Central Bank data showed.
Official reserves consist of four main components: bonds and foreign treasury bills, deposits and cash balances with foreign banks, gold holdings of the Central Bank, SDR deposits and Qatar’s share of the IMF.
In addition to the official reserves, there are other liquid foreign currency assets, and together they form what are known as total international reserves.
Qatar Central Bank’s official reserves rose by the end of October compared to the previous month by about QR 0.44bn to reach QR 142.59bn ($ 39.12bn).
Thus, the total international reserves, with liquidity in foreign currency at the bank at the end of October, increased by about QR160m to reach about QR197.23bn ($ 54.11bn), which rose by about QR65.7bn, or 50 percent from what it was in October 2017 increased 14.3 percent year-on-year in October 2018.
International reserves rose in October 2019 compared to last September, mainly as a result of the increase in the Qatar Central Bank balances from deposits with foreign banks by about QR 9634m to reach the level of QR 63.74bn, with the decline in the balances of bonds and bills The value of gold settled at the level of QR 7.39bn, and the balances of SDR deposits remained stable, up slightly to the level of QR1890m.
According to the annual comparison with October 2018, the bank’s international reserves and liquidity witnessed an increase of QR 24.8bn; or 14.3 percent to QR 197.23bn. This increase was distributed among some components of the Bank’s international reserves as follows: 1. Increase of the Bank’s portfolio of foreign bonds and treasury bills by about QR 26.21bn or 60.4 percent.
2. Increase of the bank balances with foreign banks by about QR10.6bn, or up to 20 percent.
3. The bank’s gold holdings increased by about 3 billion riyals, or 66.4 percent.
4. The stability of SDR deposits and the state’s share in the International Monetary Fund (IMF) with a limited decline to QR1.89bn.
Available comparisons suggest that Qatar Central Bank has international reserves and significant foreign currency liquidity that has placed it in a very comfortable position to maintain the stability of the Qatari currency, no matter how artificially under pressure. In this regard, these reserves and liquidity in foreign currency are nearly 11 times the amount of cash issued, while the Bank’s law requires that the percentage of not less than 100 percent only. It is also noted that these reserves are about three times the reserve money - or the so-called monetary base - with a coverage rate of about 280 percent.
As for the adequacy of reserves and liquidity to cover Qatari imports, it already covers commodity imports for more than 20 months, and nearly ten months of imports of both goods and services, although the international standard in this regard is limited to covering only three or four months.
For the 21th Consecutive Month: QCB’s International Reserves in Foreign Currency continue rising to QR197.23bn in October Qatar Central Bank’s Foreign Currency Reserves continued growing and reached QR197.23bn in October 2019, according to QCB data released Thursday.
Official Reserves consist of four main components: Bonds & Foreign Treasury Bills, Deposits & Cash Balances with Foreign Banks, Gold holdings of the QCB, SDR Deposits and Qatar’s share of the IMF.
In addition to the Official Reserves, there are other Liquid Foreign Currency Assets, which together constitute the Total International Reserves.
QCB’s Official Reserves rose by the end of October compared to the previous month by about QR 0.44 billion, to reach QR 142.59bn ($ 39.12bn). Thus, the total International Reserves, with Liquidity in Foreign Currency rose at the end of October, by about QR160m to reach about QR197.23bn (or $ 54.11bn), an increase by about QR65.7bn, or 50 percent from its level in October 2017, and increased by 14.3 percent since October 2018.
In more details, International Reserves rose during October 2019 compared with last September, and that was the result of an increase in International Reserves rose in October 2019 compared to last September, mainly as a result of the increase in the Qatar Central Bank balances from Deposits with Foreign Banks by about QR 9634m to reach the level of QR 63.74bn, with the decline in the balances of bonds and bills. The value of gold settled at the level of QR 7.39bn, and the balances of SDR deposits remained stable, up slightly to the level of QR1890m.
According to the annual comparison with October 2018, the QCB’s International Reserves and Liquidity witnessed an increase of QR 24.8bn; or 14.3 percent to QR 197.23bn. The increase was mainly due to the following:
1. The QCB’s portfolio of Foreign Bonds and Treasury Bills increased by about QR 26.21bn or 60.4 percent.
2. The QCB Balances with Foreign Banks increased by about QR 10.6bn, or up to 20 percent.
3. The QCB’s Gold holdings increased by more than QR 3bn, or 66.4 percent.
4. SDR Deposits and the State’s Share in the IMF, were stable near QR 1.89bn.
On the other hand, Liquid Assets - other than Official Reserves - (ie Foreign Currency Deposits) declined by QR15bn to QR 54.6bn from its level in October 2018.
Available comparisons suggest that QCB has International Reserves and a large Foreign Currency liquidity that has placed it in a very comfortable position to maintain the stability of the Qatari Currency, regardless of any artificial pressures. We noted that these Reserves and Foreign Currency Liquidity are equivalent to more than eleven times the Issued Currencies, or more than 1100 percent, while the QCB’s law requires that the percentage should not be less than 100 percent only. These Reserves are more than twice the so-called Monetary Base - with coverage of more than 280 percent.
As for the adequacy of the Reserves and Liquidity to cover Qatari imports, it already covers commodity imports for about 20 months, and nearly ten months of imports of both goods and services, noting that the international standard in this regard is limited to covering it for three or four months only.
(The views published in this column are those of the author and do not necessarily represent or reflect the views of The Peninsula)
