DOHA: Qatar’s sovereign wealth fund has injected deposits into local banks to shore up liquidity as an ongoing Saudi-led campaign to isolate the gas-rich Arab state hurts lenders, according to people familiar with the matter.
Qatar Investment Authority has placed billions of dollars of cash with Qatari lenders after some banks in Saudi Arabia, the UAE and Bahrain started withdrawing funds from the country amid the standoff, the people said, asking not to be identified because the information is private. The exact amount of funding provided by the sovereign fund isn’t clear, they said.
The QIA, which owns stakes in global companies ranging from Glencore to Barclays, has since told lenders that it won’t be making any more deposits directly and that any future funding will come from the central bank, one of the people said. Representatives for the QIA declined to comment.
Tensions between Qatar, one of the world’s richest countries and the biggest producer of liquefied natural gas, and its neighbours are escalating after Saudi Arabia, Bahrain, Egypt and the UAE cut diplomatic relations and closed transport routes three weeks ago. Some banks in these countries are cutting their exposure to Qatar amid concerns of a widening of the blockade, people familiar with the matter said earlier this month.
