With the Qatar Central Bank (QCB) raising the key rates by 25 basis points, the country has seen a cumulative 4.5% hike in rates since January 2022 in view of the fixed exchange parity with the US dollar.The QCB on Wednesday increased the repo rate, deposit and lending rates by 25 basis points after the US Federal Reserve hiked its reference rate by 25 basis points.The repo rate in Qatar has increased by a cumulative 4.5% or 450 bps from the beginning of 2022. Since January 2022, QCB repo rate has risen from 1% to 1.25% in March, then to 1.75% in May, 2.5% in June, 3.25% in July, 4% in September, 4.75% in November, 5.25% in December and the latest 5.5%. In 2021, the average repo rate was 1%.The central bank’s move (in increasing repo rate) has been necessitated by the fixed exchange parity with the greenback; otherwise higher-yielding dollar-based investments could put downward pressure on the local currency, market sources said, adding it may lead funds flow to bank deposits with higher returns and lower risk.The QCB lending rate has cumulatively increased by 3.25% or 325bps from the beginning of 2022. It was seen jumping from 2.5% in January to 2.75% in May, 3.25% in June, 3.75% in July, 4.5% in September, 5% in November, 5.5% in December and the latest 5.75% in March. The average lending rate in 2021 was 2.5%.On credit facilities, the interest rate (weighted average) on loans less than one year was seen increasing to 6.25% in January 2023 against 3.8% in January 2022; on loans from one to three years to 6.58% (3.39%); on loans of three years and above to 6.72% (4.11%).Similarly, the QCB deposit rate has cumulatively jumped by 4.25% or 425bps, increasing from 1% in January 2022 to 1.5% in May, 2.25% in June, 3% in July, 3.75% in September, 4.5% in November, 5% in December 2022 and 5.25% in March 2023. The average deposit rate stood at 1% in 2021.In terms of customer deposits, time deposits of one-month was seen surging to 4.43% in January 2023 compared to 1.32% in January 2022; three-month deposits to 5.03% (1.41%); six-month deposits to 5.11% (1.55%); one-year to 3.24% (1.89%) and more than one year to 3.78% (1.88%).The weighted average overnight interbank interest rate (on riyal) stood at 4.97% in January 2023 compared to 0.28% in January 2022.The overnight rates noticeably shot up from July 2022 since it was much less than 1% in January-June 2022. In July, it was 1.68% from when it began zooming to 2.62% in August, 2.61% in September, 3.7% in October, 4.31% in November, 4.68% in December and 4.97% in January 2023.
March 23, 2023 | 11:24 PM