Qatar exchange houses' foreign currency purchase, sale moderates in 2020: QCB

Purchase and sale of foreign currencies by Qatar’s exchange houses further moderated during 2020, Qatar Central Bank said and noted the “decline in remittances” contributed to the moderation in sales and purchases of foreign currencies last year.“In view of the balance between sales and purchase, the demand of foreign currencies of the exchange houses from the banks is expected to remain low. This is reflected in the low level of dues of exchange houses to the banks,” QCB said in its latest Financial Stability Review.In Qatar, outgoing remittances through exchange houses in Qatar dipped in 2020 under the twin impact of pandemic and fall in oil prices combined with increased spending within the domestic economy.As in the previous year, the decline was spread across all major regions. The share of funds to Asia continued to dominate and increased during the year. Remittances to the top five countries also moderated but relatively slowly as compared to other countries resulting in modest increase in their share.Under the current circumstances and due to customers shift to use e-banking services through smart phone applications and websites, and in view of the noticeable increase of piracy and cyber fraud attempts, exchange houses were asked to take the necessary security measures to protect network and banking services systems infrastructure. “All were advised that prior authorisation from QCB is now required for import or export of foreign currencies as well as Qatari riyal,” QCB said.Assets of the exchange houses had recorded sharp 20.6% growth in 2019 but in view of the economic slowdown, their assets during 2020 fell by 13% which, nevertheless, was still above its level in 2018. The fall in assets during 2020 was mainly due to fall in cash balances, dues from banks and other assets. Total assets as at end-2020 stood at QR1.9bn, QCB noted.On the liabilities side, dues to money exchangers and branches fell sharply followed by other liabilities.The shareholders’ equity improved during the year contributed by rise in paid up capital and legal reserves.Liquid assets with the exchange houses comprise of cash, dues from banks and dues from money exchanges and branches. Their liquid liabilities include dues to banks and dues to money exchangers and branches. Liquid assets as well as liquid liabilities of exchange houses moderated almost in tandem resulting in stable net liquid assets. However, due to moderation of aggregate assets, the share of net liquid assets in the total assets recorded a sharp recovery during 2020.