Qatar suffering unprecedented foreign currency shortage

Rubeir al-Fares

Qatar continues to suffer from the effects of the trade and diplomatic boycott of it by Arab states, some media reports said.

There was a yawning gap in July between foreign currency revenues and the demands of the country’s banks, amid a foreign currency liquidity crisis.

The crisis was induced by the failed policies of the Qatari regime, especially its support of terrorist organizations around the world.

The Qatari regime also spent a lot of money in supporting the Turkish economy which also teeters on the edge of collapse, the media reports said.

According to the Central Bank of Qatar, the foreign currency deficit amounted in July to $3.84 billion, compared with the deficit in June.

Deficit within the banks operating in Qatar reached $92 billion in July, from $88.12 billion in June.

The annual foreign currency deficit rose to 24.2%, according to official figures.

The banks operating in the market needed $154 billion until the end of July to satisfy demand.

Nevertheless, the banks had only $61.98 billion of those needs until the end of July.

Making the necessary foreign currency revenues available is the most outstanding challenge facing the Central Bank of Qatar now.

This challenge was made worse by the Arab boycott of Qatar in 2017. The boycott drove a huge amount of foreign currency out of Qatar.

Saudi Arabia; the United Arab Emirates; Bahrain, and Egypt cut off their trade and diplomatic ties with Qatar in June 2017 in protest against Doha’s support to terrorism and terrorist organizations.

This decision has had deep impacts on the Qatari economy and increased risks within the Qatari market.

In March 2018, the International Monetary Fund said that the Central Bank of Qatar had to pay $40 billion to compensate the money that fled the Qatari market.