Banking system matures in Qatar| Gulf Times – Gulf Times

Banking system matures in Qatar| Gulf Times – Gulf Times

Well-capitalised banks are supporting economic development in Qatar, along with maturation of the domestic financial systemThis year’s analysis of Qatar’s economy by the International Monetary Fund (IMF) covered a range of subjects comprehensively and in some depth. There is a considerable degree of overlap between the respective views of the IMF and Qatari institutions, including the Qatar Central Bank (QCB). Both agree that the role of a central bank is to be prudent, including deployment of counter-cyclical measures, to smooth out peaks and troughs in economic activity and help sustainable economic growth.This is generally the best disposition, and especially in the case of an economy with strong exports from oil and gas. Viewing a central bank as the engine for growth risks encouraging short-term GDP growth through public sector spending, causing imbalances in the economy. Cheap money also tends to result in speculative bubbles of asset valuations, causing further destabilising effects.Maintaining the dollar peg is another example of fiscal conservatism, where the IMF and QCB share the same policy preference. The downside of, on occasion, having to follow an increase in US interest rates owing to a rise in inflation in the US that Qatar has not experienced, is more