Qatar injects $6.9 bln in one month to offset the outflow of deposits

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Qatar’s Central Bank has revealed that Doha has pumped nearly $6.9 bln in local banks last month, according to the Reuters news agency.

The Central Bank took this action due to the decline of residents’ and private sector’s deposits in Qatari banks.

The Central Bank has reportedly held meetings with local banks to encourage them to go to the foreign debt markets, to ask for loans or to offer any suggestions to avoid further contraction in foreign cash reserves, and any new reductions in the credit ranking.

Qatar's foreign deposits fell by eight percent in July to $43 bln, after falling by a similar rate in June, according to Qatar Central Bank's monthly data.

The Wall Street Journal said in a report on Monday that Qatari banks are facing pressure with funding sources, especially with the withdrawal of foreign deposits due to the concern of foreign customers over the Qatari crisis.

Bloomberg agency quoted Qatari sources as saying that Qatar had asked local banks to resort to international markets for funding and to only go to the government as a last resort instead of relying on it mainly.

Central Bank of Qatar data showed that foreign customers' deposits in Qatari banks fell by 14 billion Qatari Riyal (equivalent of $4.12 bln) in June, which constitutes a decline of 7.58 percent.

In the same month, Qatari bank loans from banks abroad fell to about $12.7 bln in June as opposed to $14.2 bln in May.

S. Josh, an analyst at Bahrain-based investment bank SICO, said earlier that Qatari banks have about 60 bln Qatari Riyals ($16 bln) in customer deposits and interbank deposits from other Gulf countries.

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