Qatar is resorting to debt again … a liquidity crisis hitting...

Qatar is resorting to debt again … a liquidity crisis hitting...
Qatar is resorting to debt again … a liquidity crisis hitting...
The local debt markets have turned into a refuge for the Qatari government to provide scarce liquidity, with the aim of providing cash to be pumped into the current expenditures of the government in the small emirate, amid the increasing impact of the Arab boycott and the Corona virus on Doha’s economy.

And Tuesday, he said Qatar Central Bank In a statement, he and on behalf of the government, and in the context of managing monetary policy, contributing to strengthening the banking and financial system and activating open market tools, has issued varying-term permissions.

The bank stated that it issued bills with a total value of 600 million riyals ($ 165 million) distributed in three tranches, the first of the bills worth 300 million riyals (82.5 million US dollars) for a period of 3 months at an interest rate of about 0.11%, due in January / Next January.

The bank indicated that it had issued a second tranche of bills at a value of 200 million Qatari riyals (55 million dollars) for a period of 6 months at an interest rate of 0.16% due in April of next year 2021.

The Central Bank announced that it issued, on behalf of the government in the country, a third tranche of bills worth 100 million riyals ($ 27.5 million) for 9 months, at an interest rate of 0.21% due in July 2021.

In June 2017, Saudi Arabia, the UAE, Bahrain and Egypt cut diplomatic relations and transport lines with Qatar, due to Doha’s support for terrorism. What negatively affected its economy, its indicators and sectors, and pushed towards fluctuating the abundance of liquidity in the government and banks operating in the local market.

The markets are suffering

The Qatari markets, including the government, have suffered during the last period from an accelerated decline in the abundance of liquidity, especially foreign ones, which prompted the Ministry of Finance and Qatar Central Bank to go to international debt markets to provide liquidity.

Last April, Qatar officially announced the issuance of bonds and their sale in international markets with a total value of $ 10 billion, which is the second highest number of bond issuance in its history, amid a sharp decline in its revenues.

Qatar found borrowing the easiest option to provide liquidity, especially foreign exchange, in conjunction with the decline in financial revenues due to the drop in crude oil prices, in addition to the decline in gas prices, due to the decline in demand for it with a mild winter season in the European continent.

The total external public debt owed by the Qatari government increased by 25.3% on an annual basis during 2019, up from nearly 156.4 billion Qatari riyals (42.9 billion US dollars), recorded during the year preceding 2018, according to official data.

New loans

In a related context, Reuters quoted, Tuesday, four informed sources as saying that Qatar National Bank, the largest Gulf bank, plans to collect a $ 3.5 billion loan from a group of banks.

The money will be used to refinance an existing $ 3.5 billion debt facility that the bank acquired in 2017 that is repayable in December this year.

Two sources said HSBC would have a prominent role in the process. Qatar National Bank did not immediately respond to a request for comment, while HSBC declined to comment.

Two sources said that the new loan will be divided into two tranches, with maturities of three and five years; One source added, “Pricing will be limited despite the longer maturity.”

The London-listed bank avoided major Qatari deals after the Arab boycott of Doha, and gave priority to working in Saudi Arabia, which it has a strong presence in, sources told Reuters earlier.

21 international banks participate in the joint loan and the loan subscription has been pledged by Bank of America Merrill Lynch, Tokyo-Mitsubishi UFJ, Barclays Bank, Deutsche Bank, Intesa Sanpaolo, Mizuho Bank, Standard Chartered Bank, Sumitomo Mitsui Banking Corporation and United Overseas Bank.

These were the details of the news Qatar is resorting to debt again … a liquidity crisis hitting... for this day. We hope that we have succeeded by giving you the full details and information. To follow all our news, you can subscribe to the alerts system or to one of our different systems to provide you with all that is new.

It is also worth noting that the original news has been published and is available at saudi24news and the editorial team at AlKhaleej Today has confirmed it and it has been modified, and it may have been completely transferred or quoted from it and you can read and follow this news from its main source.

PREV Innovative minds descend on Riyadh to explore opportunities in tech sector
NEXT Ministry of Economy and Planning signs MoU with Saudi National Institute of Health