The Ministry of Development Planning and Statistics released a longterm report on the Qatari economy which highlighted challenges and opportunities for the banking industry.
Liquidity in the Qatari banking system has tightened and money market rates have risen because of reduced inflows of gas and oil money, the ministry said, adding that the central bank might take several steps to reduce pressure on liquidity. It could cut official interest rates, continue to suspend domestic Treasury bond issuance while resuming its suspension of Treasury bill issues, or adopt unconventional measures used by central banks in other countries such as direct purchases of commercial bonds and extraordinary loans to, or equity injections in, individual banks, said the ministry without specifying which steps were likely to be chosen.
In early 2014, the central bank announced a new loan-to-deposit requirement for banks of 100% by the end of 2017. The deposit side of the ratio includes only customer deposits and not long-term wholesale funds, which have recently been the primary source of funding for banks. The banks are still negotiating with regulators to change the loan-to-deposit formula to include longterm wholesale funds, and the deadline for compliance may be postponed until the end of 2018 because of the liquidity issues at Qatari banks, the ministry said.