The Qatar Central Bank’s (QCB) total assets increased by a significant 23.7 percent to QR233bn at the end of 2018, compared with QR188.4bn in 2017. The year 2018 witnessed considerable shifts in the composition.
There was large accumulation of net foreign assets as capital flows normalized during 2018. A major portion of these net foreign assets was developed in the form of investment in foreign securities, which increased by 286.9 percent to QR54.8bn at the end of 2018, QCB data showed.
QCB’s balances with foreign banks also increased substantially by 45.2 percent to QR49.1bn from QR33.8bn . The value of investment in gold rose to QR4.7bn from QR4.5bn. On the other hand, SDR deposits declined to QR1.39bn from QR1.42bn, primarily reflecting valuation changes. The domestic assets in the form of balances with local banks contracted substantially following the withdrawal of liquidity support, including repo transactions, provided by QCB to banks. These balances declined by 27.4 percent to QR80.2bn at the end of 2018 from QR110.5bn at the end of 2017. Yet, they continued to constitute the largest component of QCB’s assets (34.4 percent).
QCB’s other domestic assets also increased markedly by 78.4 percent to QR42.9bn and formed the fourth largest component of QCB’s assets.
With significant re-accumulation of foreign exchange reserves by QCB during 2018, the international reserve adequacy indications at the end of 2018 improved substantially. The currency issued to international reserve ratio of 681 percent at the end of 2018 was almost seven times the stipulated minimum of 100 percent in the QCB law.
The liabilities of QCB mainly consist of capital and reserves, domestic banks’ balances with QCB in the form of total reserves.
During 2018, QCB’s reserve money expanded markedly by 32 percent to QR82.9bn from QR62.8bn at the end of 2017. As in the past, the month-on-month growth in reserve money fluctuated during 2018. There were contractions in the month of January, May, June, September and November. In the rest of the months it increased, which in some were in double digits, thereby accounting for the marked increase in reserve money during 2018.
The increase in reserve money was mostly reflected in the accumulation of QMR (Qatar Money Market Rate Standing Facility) deposits, followed by excess reserve balances, of banks with QCB. The net QMR deposits rose continuously through all the four quarters, and accelerated in the second half. Thus, it rose by 334 percent to QR22.9bn at the end of 2018 from QR5.3bn. Total reserves grew by 6.7 percent to QR43.7bn, primarily driven by growth in excess reserves of 53.5 percent to QR7.7bn. The expansion in reserve money during 2018 was driven by the large accumulation in net foreign assets.
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