Slowing withdrawals of deposits from Qatari banks permitted Qatar's government to stop pumping money into the banks last month to shield them from sanctions imposed by other Arab countries, central bank data showed on Tuesday.

Banks and investors from Saudi Arabia, the UAE, Bahrain and Egypt began pulling deposits and other funds out of Qatar in June, when those four states cut diplomatic and trade ties with Doha.
The deposit outflow initially put the balance sheets of some Qatari banks under pressure, and the government responded by injecting billions of dollars of its own money into accounts at the banks. Much of the money came from the country's sovereign wealth fund - the Qatar Investment Authority (QIA).
But the outflows are now slowing, as the four states run out of money left to withdraw. That is reducing the need for the government to aid the banks.
In October, foreign customers' deposits at banks in Qatar - the vast majority in the form of foreign-currency deposits - fell by only QR5.1bn ($1.4bn) from the previous month, to QR137.7bn, data showed.
The decline was slower than falls of QR6.2bn in September, QR8.2bn in August, QR13.4bn in July and QR14bn in June.
The Qatari public sector's deposits with local banks fell slightly in October after soaring during the initial months of the sanctions, indicating the government was no longer pumping fresh money into the system as a whole.
Qatar Central Bank Governor HE Sheikh Abdullah bin Saud al-Thani said last month that the government and the central bank had more than enough financial resources to protect the banking system from outflows.
After the sanctions were imposed, Qatari banks' borrowing from foreign banks also fell sharply as institutions from the four Arab countries stopped extending loans.
October's data suggested, however, that Qatari banks have begun to have success filling this gap by increasing their borrowing from Asia and Europe.
Meanwhile, 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.
A report said Qatar is among the ‘top 10 nations’ in the world with the “best developed ecosystem” for Islamic finance, a report showed and noted that the country’s Islamic market was worth nearly $73bn in 2015.
Qatar also figured among the top ‘Muslim consumer travel expenditure market’ and was worth nearly $11.7bn in 2015, according to ‘State of global Islamic economy 2016/17’ report developed and produced by Thomson Reuters.

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