The Qatar Central Bank (QCB) has conducted a review of recent geopolitical developments and their potential impact on the domestic financial system.

The review confirmed that Qatar’s financial system remains robust, with strong liquidity, capital levels well above regulatory requirements, and adequate provisioning to cover credit risk.

According to QNA, the review highlighted that banks continue to maintain substantial liquidity in both domestic and foreign currencies.

Resources are sufficient to meet customer demand, support normal market activity, and manage any short-term funding pressures under stressed conditions.

The report noted that the structural strengths of Qatar’s banking sector, demonstrated during previous periods of global market stress, continue to underpin its resilience, even amid external uncertainties.

In response, the QCB has announced precautionary measures to support financial stability.

It will offer an unlimited amount of Qatari riyal (QAR) repurchase (repo) facilities against eligible securities held by banks, ensuring deep liquidity in the local market.

The QCB will introduce a new term repo facility with maturities of up to three months, alongside the existing overnight repo facility, to help banks manage cash flow with greater certainty.

It will reduce the reserve requirement on deposits from 4.5% to 3.5%, releasing additional liquidity into the system.

Banks will be allowed to offer borrowers affected by current conditions the option to defer principal and interest payments for up to three months, following internal policies and supervisory guidance.

The QCB will continue to monitor developments at global, regional, and domestic levels and take timely and prudent actions as necessary to maintain financial stability and orderly market functioning.

Featured image credit: Edited by Fintech News UAE, based on image by TravelingOtter via Flickr