Exchange houses see ‘moderation’ in foreign currency sale and purchase on remittance fall: QCB
August 24 2020 07:52 PM

The decline in remittances contributed to the “moderation in sales and purchases” of foreign currencies by exchange houses in the country, the Qatar Central Bank (QCB) has said in a report.

“With improved balance, the demand for foreign currencies by the exchange houses from the banks are expected to ease and is reflected in the continued decline in dues of exchange houses to the banks,” QCB said in its 11th Financial Stability Review.

The remittances through exchange houses in Qatar, which recorded a sharp fall in 2018, declined further, albeit marginally during 2019, the QCB said.

“As in the previous year, the decline was spread across all major regions. Remittances to blockading countries declined further during the year,” QCB said.

The continued fall in remittance to other regions can be attributed to “increased spending” within the domestic economy.

The share of the top five countries remained stable as decline in remittances to two out of the top five countries was offset by increase in remittance to the other three countries.

The share of various regions remained almost stable as compared to the previous year, it said.

Liquid assets with the exchange houses comprise of cash, dues from banks and dues from money exchanges and branches. Their liquid liabilities include dues to banks and dues to money exchangers and branches. Both liquid assets and liquid liabilities of the exchange houses increased during the year with larger increase in the former, resulting in rise in the level of net liquid assets, the QCB said.

The share of net liquid assets in the total assets, however, declined due to the sharp rise in the total assets.

The “healthy growth” in assets coupled with decline in the shareholder’s equity resulting from the lower retained earnings contributed to lower ratio of shareholders’ equity to total assets.

At the same time, the QCB noted the healthy growth in paid up capital combined with decline in the retained earnings resulted in sharp rise in the share of the former in the total shareholders’ equity while that of the latter declined.

The share of liquid assets in total assets moderated but remained high at 83.1%, the report noted.

Consequent to the robust growth in total assets, the ratio of exchange house assets to bank assets and that to GDP increased significantly, QCB said.

Last updated: August 25 2020 12:06 AM

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