The gas-rich nation is more than capable to withstand the crisis and support its banks with assets in the emirate’s vast sovereign wealth fund and foreign currency reserves, the central bank governor said.
Routine stress tests conducted by the central bank revealed the strength and efficiency of Qatari banks in difficult times.
Qatar is being forced to spend heavily to support the banks and keep a check on the US dollar after the Saudi-led bloc severed ties with Doha in June.
Qatar has spent nearly $40 billion into the economy and financial system in just two months, Moody’s Investors Service said on Sept. 13. The Qatar Investment Authority, which in the past spent billions on assets around the world, is also becoming a seller.
Adequate capital, the availability of liquidity and high profitability enjoyed by Qatari banks have encouraged the lenders to come forward. The Central Bank has asked the lenders to tap the international investors to raise financing and not just depend on the government.
The economy is likely to grow this year at the slowest pace since 1995, according to economists. Gross domestic product expanded 0.6 percent in the second quarter ended June 30 from a year earlier, compared with 2.5 percent in the January-to-March period, according to official data.