No need to change riyal’s dollar peg now: QCB governor
June 23 2021 10:14 PM
HE the QCB Governor Sheikh Abdulla bin Saoud al-Thani.
"There is no need to change our fixed exchange rate regime because of inflationary signs seen in the US," HE the QCB Governor Sheikh Abdulla bin Saoud al-Thani.

Qatar does not think there is currently a need to change its fixed exchange rate regime, under which riyal is pegged to the dollar, said HE the QCB Governor Sheikh Abdulla bin Saoud al-Thani.
“There is no need to change our fixed exchange rate regime because of inflationary signs seen in the US. Inflationary pressures are usually cyclical, but it is difficult to say whether there will be inflationary pressures in the long run or not. This is not something we need to worry about to the point we have to change the fixed exchange rate regime now,” Sheikh Abdulla said at a session at the Qatar Economic Forum, Powered by Bloomberg Wednesday.
He said, “I don’t think there is a risk of inflation, although we have seen fast recovery following Covid-19… and that has created some kind of demand pull. Some governments have also increased their expenditure. The vaccination rollout and recovery, which we have seen in the period following Covid-19 created a very strong demand pull, which can lead to some kind of temporary inflation.”
But Sheikh Abdulla noted, “In Qatar, we are linked to the price of oil. And for us, inflation and the fixed exchange rate regime are really an added value. These are also mitigating a lot of risks.”
The QCB Governor said, “The only thing we are worried about is the lower interest rates, which we have seen for almost a decade now. This is because we have seen some investors investing in very high yielding risky investments, even as the borrowers are comfortable over (lower interest rates) for a certain period of time.”
On the current oil price and its impact on Qatar economy, Sheikh Abdulla said, “This year, our oil price estimate for the budget is $40 a barrel…and it is $75 now. I think this is very good for our economy. I don’t know how other countries are affected, but definitely we believe $75/b for us is good. We are almost halfway through the year – so we are hoping that prices will remain stable until the end of the year.”
Asked whether Qatar would help other GCC countries, particularly Oman and Bahrain that have been strained economically in view of the ongoing situation, he said, “It is done always through the Ministry of Finance concerned in the GCC, and they discuss these matters – financing between countries is not on the agenda of the governors of the central banks in the GCC.”
Sheikh Abdulla said, “It is very important that we also reorganise our monetary and fiscal policy for any challenge that comes in future. More so because we are gradually coming out of the impacts of Covid-19 and the ‘some kind’ of siege or blockade.”
On digital currencies, he said, “I think central digital currency are very important for us as central bankers. But I don’t think there is a big role here in Qatar. We have already set a very good foundation…we have a good strategy about financial technology…we have done a lot of research on central digital currency.
“But as central bankers we have to be careful about the soundness and the reliability of the payment system. This is a very important area because we have seen some financial technology being involved in the payments (system)… and we have also seen some big tech involved in it. Therefore it is very important for the central banks that payments should be reliable, sound and very strong for settlement, for clearing and for our investors. So we are keen about this payment system and that it should be under a very good environment.”



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