Sunday, 15 November 2015 16:03
DOHA: Qatar’s central bank is comfortable with liquidity levels in the banking system and does not see any need for intervention in the money market ahead of a possible U.S. interest rate hike, central bank governor Sheikh Abdullah bin Saud al-Thani said on Sunday.
“Liquidity is very comfortable at the moment. I don’t see there is a need of any intervention at the moment.
“The interest rate in the U.S. might in the future go up and that will give us a chance to review monetary policies, which will be based on the condition of the market at that time,” he told reporters on the sidelines of a conference in Doha.
Sheikh Abdullah also said the recent reduction in the size of Treasury bill issues was not a sign of tightening liquidity. In October and November, the central bank sold half the amount of bills that it planned at auctions.
“The drop from 4 billion (riyals) to 2 billion in Treasury bills is not a sign of anything, it’s just trying to base the quantity of Treasuries to smooth the yield curve. It’s not a sign that there is no interest, it has nothing to do with liquidity,” Sheikh Abdullah said.
The three-month Qatar interbank offered rate has jumped to 1.40 percent from 1.19 percent at the end of September. Private bankers believe the rise is related to the approach of a U.S. rate hike and a reduction in new oil and gas revenues flowing through the system because of low energy prices.
