Qatar sovereign fund deposited dollars in local banks ‘as precaution’

DOHA: Qatar’s sovereign wealth fund made US dollar deposits in some local banks last week as a precaution after Saudi Arabia and other Gulf states cut diplomatic and transport ties with Doha, Qatari commercial bankers said.
One Qatar-based banker, whose own institution received funds, said new deposits in the banking system by the Qatar Investment Authority (QIA) at the end of last week were believed to total several billion dollars. He described the deposits as “pre-emptive.”
At a recent meeting between top commercial bank executives and central bank officials, the executives said they did not need dollar liquidity at present, the banker told Reuters, refusing to be named because of commercial sensitivities.
But if the diplomatic crisis lasts another three or four months, and Saudi Arabian and UAE banks pull their deposits out of Qatar, local banks might need official help, the banker said.
The QIA refused to comment. Asked for comment, a central bank official told Reuters: “The QIA regularly places deposits in local banks — this is normal. Contrary to media reports, there haven’t been big withdrawals from banks in Qatar, and the embargo is only having a limited effect on the banking sector here, and one that is easily manageable.”
Qatar’s banks became dependent on foreign funding during the last few years of strong economic growth. Their foreign liabilities increased to QR451 billion ($124 billion) in March from QR310 billion at the end of 2015.
Yousef Al-Jaida, chief executive of the Qatar Financial Center, said this week that institutions from Saudi Arabia, the UAE and Bahrain had about $18 billion of deposits in Qatari banks that would mature in two months.