QCB guarantees riyal’s onshore FX rates to QSE investors
November 28 2017 08:42 PM
Qatar Central Bank
In a letter addressed to the QSE, the QCB said that "the guarantee will stand as long as the index provider MSCI continues to use the Qatari riyal’s onshore FX rates in its indices and this guarantee should address any concern the MSCI investors might have on their capacity to freely trade the Qatari riyal at official onshore forex rates."

Doha

The Qatar Central Bank (QCB) has dispelled apprehensions of investors in the Qatar Stock Exchange (QSE) over MSCI’s proposed move as it will guarantee an exchange rate equivalent to the Qatari official onshore rates.

In a letter addressed to the QSE, the QCB said that "the guarantee will stand as long as the index provider MSCI continues to use the Qatari riyal’s onshore FX rates in its indices and this guarantee should address any concern the MSCI investors might have on their capacity to freely trade the Qatari riyal at official onshore forex rates."
The letter also referred to the QCB's stated commitment to provide all requirements of foreign currencies at the official rates to all QSE investors.
The letter came as a response to MSCI’s announcement last week of launching consultations with investors to use offshore rates instead of local forex rates for the Qatari riyal in its indices.
Earlier, Doha's bourse had expressed the hope that the MSCI will maintain status quo on the use of official foreign exchange rates for transactions rather than the offshore rates.
Days after the siege countries imposed economic blockade, there were reports of pressure on riyals in the forward markets but soon that was dissipated with Qatar asserting that it has enough financial buffers to the tune of 250% of gross domestic product to ring-fence the economy.
"The QCB has much more than the required foreign reserves to cover all investors’ requirements," the QSE spokesman said, highlighting the QCB's commitment to provide foreign currencies at the official exchange rates for investors including local and foreign individuals and institutions.
In an interview to Euromoney, QCB governor Sheikh Abdulla bin Saoud al-Thani said the central bank is committed to maintaining the stability of the riyal's peg to the US dollar.
Market experts said the issue is not a concern in the short-to-medium term, considering that Qatar’s natural gas exports continue to be unhindered and that it has huge reserves, especially in the form of assets under its sovereign wealth funds.



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