Qatar pours more billions into local banks amid crisis

DUBAI: Qatari authorities stepped up their support of domestic banks for the third month in a row in August in an attempt to offset foreign withdrawals as the showdown between the Gulf emirate and a Saudi-led alliance show no sign of abating.

Public-sector deposits in the world’s largest exporter of liquefied natural gas grew by 10.5% to 295 billion riyals (US$80bil) from 267 billion riyals in July, according to central bank data. That bring the increase to about 53 bil- lion riyals since the crises broke out more than three months ago.

The support helped total domestic deposits grow 5% to 645 billion riyals even as non-resident deposits declined for a third straight month to 149 billion riyals, the data show. They stood at 171 billion in June.

The Qatari economy is bearing the brunt of the Saudi-led boycott, with economists expecting gross domestic product to grow at the slowest pace since 1995. The Qatar Investment Authority, the country’s sovereign wealth fund, pumped almost US$40bil of its US$340bil of its “financial reserves to support its economy and financial system during the first two months of the standoff,” Moody’s Investors Service said in a report on Sept 13.

The QIA, as the sovereign wealth fund is known, sold a block of shares in luxury jewellery retailer Tiffany & Co, weeks after reducing its stake in Credit Suisse Group AG.