Qatar's macroeconomic environment is expected to further improve along with increasing rate of vaccination, Qatar Central Bank said in its latest Financial Stability Review.
QCB noted that the budget allocation of additional QR72.1bn for major projects related to World Cup was expected to provide necessary impetus for development activities.
Proactive response to the Covid-19 pandemic by the authorities facilitated the economy to be back on track within five to six months since the strict preventive measures to contain the spread of pandemic was initiated.
The policy package (QR75bn) to counter the economic impacts from the pandemic consisting of monetary policy and macro-financial measures has positively impacted the macroeconomic environment.
The financial market conditions remained broadly in order after initial reactions, QCB said in its 12th Financial Stability Review. “Qatar banking sector remained unscathed supported by higher capital buffers and ample market liquidity. Banks have also increased their provisioning to mitigate probable risk from credit quality,” QCB said.
QCB's “proactive move” to provide liquidity support to the banks brought positive sentiments which assisted the banks to improve their funded liquidity from both external and domestic sources.
More broadly, the banking sector has improved its structural liquidity by lengthening the maturity structure and expanding the geographical diversity of its external sources of funding. “Overall, amidst the negative externalities from the pandemic, the banking sector in Qatar remained safe, sound and liquid,” QCB noted.
“Going forward, it is expected that the macroeconomic environment will further improve along with increasing rate of vaccination. Budget allocation of additional QR72.1bn for major projects related to world cup, expected to provide necessary impetuous for the developmental activities,” QCB said in its Financial Stability Review.
The lifting of the blockade by some neighboring countries is “another” positive development, which may further increase the trade and related activities among the GCC countries, QCB said.
It said banking sector in Qatar can reap the benefit of such renewed optimism by expanding their asset size through enhanced financial intermediation.
Given the higher capital buffers banks have enough legroom to expand their asset size so that profitability can be improved, QCB said.
The country’s banking sector may also benefit from the accessibility of financial markets and the additional pool of liquidity available from these countries.
“However, challenges remain. The second wave of pandemic across the globe and how it will impact the global trade and commodity prices have its concerns on the banking sector's asset quality and profitability,” QCB said in its Financial Stability Review.
Proactive response to the Covid-19 pandemic by the authorities facilitated the economy to be back on track within five to six months since the strict preventive measures to contain the spread of pandemic was initiated.
The policy package (QR75bn) to counter the economic impacts from the pandemic consisting of monetary policy and macro-financial measures has positively impacted the macroeconomic environment.
The financial market conditions remained broadly in order after initial reactions, QCB said in its 12th Financial Stability Review. “Qatar banking sector remained unscathed supported by higher capital buffers and ample market liquidity. Banks have also increased their provisioning to mitigate probable risk from credit quality,” QCB said.
QCB's “proactive move” to provide liquidity support to the banks brought positive sentiments which assisted the banks to improve their funded liquidity from both external and domestic sources.
More broadly, the banking sector has improved its structural liquidity by lengthening the maturity structure and expanding the geographical diversity of its external sources of funding. “Overall, amidst the negative externalities from the pandemic, the banking sector in Qatar remained safe, sound and liquid,” QCB noted.
“Going forward, it is expected that the macroeconomic environment will further improve along with increasing rate of vaccination. Budget allocation of additional QR72.1bn for major projects related to world cup, expected to provide necessary impetuous for the developmental activities,” QCB said in its Financial Stability Review.
The lifting of the blockade by some neighboring countries is “another” positive development, which may further increase the trade and related activities among the GCC countries, QCB said.
It said banking sector in Qatar can reap the benefit of such renewed optimism by expanding their asset size through enhanced financial intermediation.
Given the higher capital buffers banks have enough legroom to expand their asset size so that profitability can be improved, QCB said.
The country’s banking sector may also benefit from the accessibility of financial markets and the additional pool of liquidity available from these countries.
“However, challenges remain. The second wave of pandemic across the globe and how it will impact the global trade and commodity prices have its concerns on the banking sector's asset quality and profitability,” QCB said in its Financial Stability Review.
