Arab News: Qatar Central Bank will allow banks to defer loan payments and boost liquidity support as geopolitical conflicts escalate, aiming to safeguard financial stability.
The central bank said lenders can defer principal and interest payments for up to three months for affected borrowers, in accordance with their internal policies and supervisory guidance.
The steps come as Gulf policymakers respond to the impact of the conflict involving the US, Israel and Iran, which has increased uncertainty across regional markets.
Earlier this month, the Central Bank of the UAE rolled out a similar financial resilience package to support banks, including easier access to liquidity, temporary relief on funding and capital buffers, and flexibility for loan classifications.
The package also allows banks to tap a larger share of reserve balances and eases regulatory requirements to help sustain credit flows during periods of stress.
In a release, QCB stated: “The review confirmed that the financial system continues to operate from a position of strength. Liquidity continues to be strong, capital levels significantly exceed regulatory requirements, and provisioning provides strong coverage against credit risk.”
It added: “The review noted that banks continue to hold substantial liquidity in both domestic and foreign currency and that resources are sufficient to meet customer demand, support normal market activity, and meet any short-term funding pressures under stressed conditions.”
The central bank said that the banking system has shown resilience during previous global shocks and that current developments have not changed its underlying strength, although the external environment remains uncertain.
QCB also announced additional liquidity measures, including unlimited Qatari riyal repo facilities against eligible securities and a new term repo facility of up to three months.
“This new term repo facility will enable banks to manage cash flow with greater certainty during the current period,” the release added.
It will cut the reserve requirement on deposits to 3.5 percent from 4.5 percent to release more liquidity into the system.
The central bank noted that it will continue to monitor global, regional, and domestic developments closely and will act in a timely and prudent manner to support financial stability and orderly market functioning.
https://www.arabnews.com/node/2638150/business-economy
