Wednesday, August 10, 2011

Qatar Central Bank Cuts Deposit Rate 25bps to 0.75%

The Qatar Central Bank reduced its main overnight deposit facility interest rate by 25 basis points to 0.75%% from 1.00% in order to boost the non-oil sector and regulate capital flows.  The Bank also reduced the overnight lending facility interest rate by 50 basis points to 4.50% from 5.00%, and cut the repo rate by 50 basis points to 4.50% from 5.00%.  The Qatari economy is expected to grow at a rate in excess of 15% this year due to increased gas output, high oil prices, and a 19% increase in government spending.

 Previously the Qatari central bank reduced its interest rates in April this year for similar reasons; dropping the overnight deposit facility rate by 50bps to 1.00%, the overnight lending facility rate by 50bps to 5.00% and the repo rate by 55bps to 5.00%.  Qatar reported annual GDP growth of 22.7% in the March quarter this year, compared to 28.7% in the December quarter last year.  Qatar's consumer price inflation rate was 1.7% in May, up from 1.5% in April.


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